Book contents
- The Cambridge Handbook of Law and Entrepreneurship in the United States
- The Cambridge Handbook of Law and Entrepreneurship in the United States
- Copyright page
- Contents
- Contributors
- Introduction
- 1 Entrepreneurial Action
- Part I Regulating, Lawmaking, and Entrepreneurial Action
- Part II Governance and Entrepreneurial Action
- 7 Relational Contracting and Business Norms in Entrepreneurial Finance
- 8 Biotech Strategic Alliances in Law and Entrepreneurship
- 9 The Entrepreneurial Business Judgment Rule
- 10 Entrepreneurial Action in Family-Controlled Companies
- Part III Legal Incentives Supporting (and Sometimes Discouraging) Entrepreneurial Action
9 - The Entrepreneurial Business Judgment Rule
from Part II - Governance and Entrepreneurial Action
Published online by Cambridge University Press: 07 April 2022
- The Cambridge Handbook of Law and Entrepreneurship in the United States
- The Cambridge Handbook of Law and Entrepreneurship in the United States
- Copyright page
- Contents
- Contributors
- Introduction
- 1 Entrepreneurial Action
- Part I Regulating, Lawmaking, and Entrepreneurial Action
- Part II Governance and Entrepreneurial Action
- 7 Relational Contracting and Business Norms in Entrepreneurial Finance
- 8 Biotech Strategic Alliances in Law and Entrepreneurship
- 9 The Entrepreneurial Business Judgment Rule
- 10 Entrepreneurial Action in Family-Controlled Companies
- Part III Legal Incentives Supporting (and Sometimes Discouraging) Entrepreneurial Action
Summary
The business judgment rule can be justified on multiple grounds, ranging from concerns with hindsight bias, to doubts about judicial expertise, to worries about excessive director caution (and this is an incomplete list). We can also understand this rule as a mechanism to facilitate entrepreneurial action. In part, this is a product of the normal operation of the rule, with its high level of judicial deference. It is also a consequence of the rule’s limited exceptions, and the courts’ reluctance in adding new ones. I will focus in particular on the rejection of external benchmarks for measuring the reasonableness of a business judgment.
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- Publisher: Cambridge University PressPrint publication year: 2022