The Uniform Model of the Business-Judgment Rule: a Comparative Study in English, American, Australian and Iranian Law

Abstract

The Business-Judgment Rule can be defined as a doctrine that protects directors from personal responsibilities if they act in good faith, with due care and within the framework of their powers and duties, including the care and fiduciary duty. Accordingly to this research, with a comparative study of the American, England, Australian and Iranian law by relying on the analytical descriptive method, various models of the application of the Business-Judgment Rule were pointed out and the factors that led to the use of these models were investigated. Finally we concluded that the chance of using the uniform model of the Business-Judgment Rule is very low; but modern mechanisms of the corporate governance system in the field of responsibility and economic efficiency lead to the implementation of a legal or explicit model of the application of this rule.

Keywords

• the business-judgment rule
• care duty
• fiduciary duty
• derivative litigation
• legal model
• explicit model
• implicit model