| Summary: | 碩士 === 東吳大學 === 法律學系 === 96 === The business judgment rule is developed by the American court practice. The rule shields corporate directors and officers from liability for unprofitable or harmful corporate transactions if they were made in good faith, with due care, within the directors’ or officers’ authority and no waste of corporate asset. The rule is a presumption that can protect directors from change of misconduct as long as the conduct attributed to any rational business practice. In order to plead and prove a claim, a plaintiff must allege and demonstrate the facts that can overcome this presumption. Where the presumption is overcome, directors bear the burden of proving the fairness of the challenged conduct. A presumption in favor of directors protects them, with the consequence that they can do business decisions without fearing of taking on responsibility.
The rule is on the premise that directors have a fiduciary duty to act for the benefit of company. The duty includes duty of care and duty of loyalty even acting in good faith. The article23, paragraph 1 of company act of R.O.C also provides that the director of company shall have the loyalty and exercise the
duty care of a good administration in conducting the business operation of the company, and if he/she acted contrary to this provision, shall be liable for the damages sustained by the company there-from. Its purpose is close to the American law’s business judgment rule. Some academics, to get rid of the possibility of liability out of court’s hindsight finding, approve of introduction business judgment rule into Taiwan. But the concept of business judgment rule involves that a shareholder plaintiff has the “heavy burden” of alleging and proving facts to the preponderance of evidence when he/she challenges the director’s decision. It differs from the Taiwan Code of civil procedure that empowers the judge to freely evaluate the fact and evidence. Therefore, if we do not bring in the rule into Taiwan, it won’t impede the director operation of the company. Furthermore, Taiwan company act, which is unlike Anglo-American law taking director’s skill and diligence as the test of duty care , adopts the integration of civil and business law that recognizes the negligence in the same way. And the director who breaches the duty of care will accord with same standard. Besides the connotation of director’s loyalty has to replenish in court practice. Consequently, that we don’t bring the Business Judgment Rule into Taiwan will not hamper directors to administer the business of corporation.
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