Although business judgment rule has a long tradition in the United States of America, the courts in European countries with continental legal systems have only started to use it in the last decades for dealing with business decisions of management. Slovenia is one of the shrinking group of countries that has not yet transferred the rule from case law to law in books.
Business judgment rule enables the courts to make use of requirements of the rule in order to properly adjust the judicial decision whether board members are liable for business decisions that resulted in losses for the company. In pursuit of finding the core purpose and practical contribution of requirements of the rule, this master's thesis first explains the concept of corporate governance and dynamics among the different subjects in the company's framework. After a brief mention of management's duties in Slovenian law as well as the law in other countries, thesis continues with an overview of development of the rule's requirements in the rule's cradle, the United States of America. Following is the presentation of different varieties of business judgment rule in different legislative and quasi-legislative acts and the clarification of reasons for so many variations of the rule, which are shaped mostly by different understandings of its core purpose. Detailed explanation of each individual requirement is next, from its first mentions in case law to its modern interpretation with respect to the way each requirement is interpreted in Slovenian case law.
The question of suitability of the Slovenian perception of business judgment rule is followed by final conclusion which emphasizes the importance of discretion field the rule's requirements create if they are, to the certain extent, undetermined.
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