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The Research on Introducing the Business Judgment Rule to China

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DOI: 10.23977/law.2022.010109 | Downloads: 9 | Views: 659


Mo Hu 1


1 Comprehensive Law Enforcement of Dalang, Dongguan, Guangdong, China

Corresponding Author

Mo Hu


The business judgment rule originates from American as an efficient law tool to maintain the stability of the operation of corporation. The business judgment rule as an efficient tool of corporate governance, which plays a significant role in balancing the liability and the duty of directors. It serves as a safe harbor for director management from risk of liabilities brought from necessary decision makings. In detail, a "good faith" director could be cleared of all suspicion of dishonest if they meet the requirements of the business judgment rule. Although the current Chinese company law regulates the fiduciary duties of directors, but it still leave some Abstractroom for managers and directors to conduct their behaviors and perform their duties. But the introduction and implementation of this rule could reduce the existed deficiency in current Chinese company legislation as well as promote the efficiency of the decision making systems and procedures.


The business judgment rule, Directors' duties, Corporate governance


Mo Hu, The Research on Introducing the Business Judgment Rule to China. Science of Law Journal (2022) Vol. 1: 51-53. DOI: 10.23977/law.2022.010109.


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