Business judgment Rule (BJR)

Presumption in shareholder litigation that managers operate in the interests of shareholders when they make decisions. Absent special circumstances, the business judgment rule provides that the decisions of the board will not be subject to second guessing by the courts as long as the directors acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company. It applies only to ordinary business decisions. There is no examination of reasonableness. The plaintiff has the burden to show that the defendant violated the BJR.