| Abstract [eng] |
The business judgment rule is one of the main instruments used in certain countries to define the limits within which the management bodies of a company may be held liable. The origins of this instrument can be traced back to the decisions of the US courts, in particular those of the State of Delaware. The US business judgment rule is used as one of the standards of review, which establishes a presumption that the governing bodies of a company have acted with due care, in good faith and in the best interests of the company, until that presumption is rebutted by shareholders. Thus, in the US, the analysis of business decisions and the liability of the management bodies for those decisions essentially looks at whether the fiduciary duties of good faith, loyalty and care have been fulfilled. Similarly, in Germany, which is particularly significant as the first country to incorporate the business judgment rule model into its legal system in Europe, business decisions are assessed through 5 conditions, the entirety of which allows the courts to apply the business judgment rule and not to impose any liability on the company's management bodies. These five conditions are broadly in line with the fiduciary duties applied in the US, but expanded into five separate conditions. Among other things, the paper analyses the European Model Company Act, first published in 2017, which was developed by legal academics from different European countries with the aim of providing a generalised model company act that could be used as a best practice by states. The Act refers to the business judgment rule as an institute with a particularly strong impact on European countries. Accordingly, the paper also analyses Lithuanian case law. Although, until the introduction of this term in 2013-2014, broadly similar principles were applied, the rule has brought more clarity and consistency to the assessment of business decisions. In Lithuania, the business judgment rule is used as one of the applicable principles for determining civil liability, as managers can only be held liable if all four conditions for civil liability are proven. |
