Application of Business Judgment Rule in the Russian Realities

DOI: 10.33917/es-4.162.2019.126-131

The clause considers The Business Judgment Rule with which help the management can legitimize the decisions, supposing thus honest mistake. The given rule gives wide discretion at accepting the decisions by organs of government (management, board of directors). Using the given mechanism, the company management can protect itself in court from charges from shareholders. The modern Business Judgment Rule makes certain demands concerning managerial decisions and their consequences. The author considers application of the Business Judgment Rule taking into account additional criteria in the Russian realities

The Ambivalent Nature of Organs of Government of the Company

#9. Preserving humanness
The Ambivalent Nature of Organs of Government of the Company

The author considers features of functioning of organs of government (board of directors and management) in joint-stock company. It is possible to present company director not only in the form of organs which is born by fiduciary duties of due care before the company and its shareholders of the company, but also as agents who render services to shareholders. The author suggests to consider organs of government in two directions (as corporate organ which are allocated by powers and are a company integral part and as agents who render services to shareholders) as such review allows shareholders to expect the true purposes of a director and not to admit destruction of shareholder value.