Directors Must Act in Good Faith to Protect Corporate Interests
The article discusses the importance of good faith in corporate law, especially for independent directors of large corporations. It explores whether acting in good faith is a separate duty or part of the duty of loyalty. The duty of loyalty includes acting in the best interests of the corporation, monitoring affairs, and complying with the law. The research shows that directors can only be held liable if they consciously fail to make a good faith effort to fulfill their duties. This helps protect the business judgment rule in corporate law.