Comparative Study on Business Judgement Rule and Duty of Care in Korea and the U.S.

Considering that the business judgment rule and fiduciary duties play key roles in interested transactions and usurping corporate opportunities, which have been mainly done by and for controlling shareholders, the lack of detailed principles of fiduciary duties and the lack of provisions for regulating controlling shareholders show that Korean commercial law does not always adequately protect minority shareholders. Also, Korean corporate governance law is still missing the key components of the business judgment rule needed to make it an effective system. This article examine debates on business judgment rule for corporate governance in Korea to find out appropriate roles of business judgment rule and fiduciary duties to improve corporate governance in Korea. To do so, this article review business judgment rules in Korea and the U.S., and analyze both. This article will try to show that business judgment rule need to be adopted to make fiduciary duties functional for protecting minority shareholders rights and improving corporate governance in Korea because Business judgment rule is the basis of the fiduciary duties of directors.