It exists but is generally overstated: > The Business Judgment Rule asserts that as long as the Board of Directors conducts a reasonable effort to make informe

It exists but is generally overstated: > The Business Judgment Rule asserts that as long as the Board of Directors conducts a reasonable effort to make informed decisions about what is best for a company in the long-run, a court will not question said decisions. [1] My layman's understanding is it's fairly narrowly interpreted and really isn't as ever present in the backs of the minds of board members as the internet would suggest. you have to demonstrate some pretty awful judgement or get caught admitting your reasoning for a decision was opposition to shareholder interests. The simpler explanation is that board members and executives have perverse incentives to act in short term interest so they do. As long as they avoid doing it negligently then they won't face any consequences even if most shareholders want a long term approach. [1] https://www.thesustainableinvestor.net/blog/2016/02/23/fact-v-fallacy-the-legal-duty-of-public-corporations https://www.thesustainableinvestor.net/blog/2016/02/23/fact-...