Business Judgement Rule s180 (2) CA

For it to apply, did the directors:

• Act in good faith s181
• Use powers for proper purpose
• have no personal interest in transaction
• provide false info (s 1309)

Also note s189 defence

Did the director actually make a judgment?

If director did not actually make any judgements (or make a reasonable delegation under s190) but rather just abrogated their responsibilities and left matters up to someone else, successfully utilising the business judgement rule defence may be problematic, see ASIC v Adler. 

• Can’t escape by avoiding knowledge ie no financial reports

• Reasonable director would get reports

See Clark (abdication of responsibility) and Plymin and Elliott – ‘sustained and continuous course of inexcusable and unjustified neglect of important duties of non-executive director.’