This case also explains when a director will be held to have acted reasonably as part of relying on the business judgment rule.
In particular, the court confirmed that the reasonableness of a director's belief should be assessed by reference to the:
- importance of the business judgment to be made;
- time available for obtaining information;
- costs related to obtaining information;
- director or officer’s confidence in those exploring the matter;
- state of the company’s business at that time and the nature of competing demands on the board’s attention;
- evidence available as to whether or not material information is reasonably available to the director.
** For the trainspotters, the title of today's post is riffed from the National song ‘Reasonable Man’.
Listen here: