Business Judgement Rule and Corporate Social Responsibility

Abstract

The business judgement rule provides protection for directors against claims for damages when making business decisions. The rule allows governing bodies to operate without fear if they have acted in good faith. Effectiveness of corporate governance and social responsibility go hand in hand. CSR is also a coherent force of modern entrepreneurship and is the right answer to today's challenges. CSR brings reassurance to society, as it advocates both free economic initiative and social responsibility for environmental, social, and universal social issues. Above all, the social responsibility of entrepreneurs and businesspeople is in their interest, as it raises awareness of the importance of their work and the contribution they make to the community. So, companies which accept CSR are more successful. These are positive synergies within society. CSR is the way of governance (societal and corporate) that takes into consideration social consequences of governance decisions as equally important as economic ones (capital gain).