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[quote=Anonymous][quote=TheManWithAUsername][quote=Anonymous][quote=TheManWithAUsername]
That's not what the BJ rule says. That's just a burden of proof rule, basically. It makes it harder to prove that a director breached, but it doesn't change the fundamental duty.

The BJ rule makes it harder to show that an action apparently against the shareholder's financial interest in fact was, but if a director announces that he took an action he knew to be against the corporation's financial interest, he admits his breach of fiduciary duty.

Do you contend that a director can, within the law, intentionally sacrifice the shareholders' financial interests to some other cause and not be liable? (Note that this is not the same as a short-term sacrifice, e.g. donating to charity in the interest of PR.)

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I suppose that depends on what you mean by "intentionally sacrifice."  As I myself said, a director can't just give shareholders' money away to some cause they think is more worthy.  (Can't we all agree that is a pretty good rule?)[/quote]
I didn't hear anyone complain about it.

[quote=Anonymous]Could a director say "despite the fact that there is a positive expected return to selling a defective product because the likely profit outweighs the likely adverse tort judgments, we are not going to sell defective products because it is just plain wrong" without running afoul of any principle of corporate law?  Absolutely, as far as I know -- feel free to cite something to the contrary, if you think I'm wrong.[/quote]
You're muddying the issue. Obviously, no one is obliged to violate other laws - including tort law - to meet his/her fiduciary duties. A director doesn't have to illegally pollute or murder anyone, either.

[quote=Anonymous]Corporate directors obviously have a duty to act in their shareholders' financial interest, but not, as far as I know, a duty to push that principle to the absolute limit without any consideration of morality or social impact.   They have far more discretion than that.[/quote]
They absolutely do not have the discretion to act in the public good - i.e., to be moral or consider the social impact - to the detriment of their shareholders. They have a duty to their shareholders and no duty, other than as defined by other criminal and civil law, to anyone else. To the degree that they sacrifice the shareholder's interests to those of society or any non-shareholder member of it, they have breached their duty.

As I said above, I think you're confusing their latitude as a matter of proof with discretion over whether to support their shareholders' interests. Let's say a director of a large company authorizes a $10k gift - relatively very small - to a homeless shelter. When questioned, if he says he thought it was good PR no one can go after him b/c he gets the benefit of the doubt. But if he says, "Well, it cost us very little, and I just thought it was the right thing to do," he owes the corporation $10k (if anyone wants to bother suing).
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I'm not confusing the issue.  Technically speaking, the directors have two duties:  a duty of care, which is quite lenient and enforced by the business judgment rule and a duty of loyalty, which largely acts to exclude self-dealing.  I freely concede that, at a certain point, a director's consideration of social impact could rise to the level of a breach of one of these duties.  I remain unconvinced that these duties actually extend to the proposition that a director must ignore all social or moral considerations if that would allow the corporation to make an additional nickel in profit.  I'm not talking about practical remedies here, I am talking about the theoretical extent of the duties.  It's a pretty radical duty you are postulating, and I don't think it naturally emerges from the ways the duties of directors are defined.  It's one think to say you have a duty of loyalty and care to your shareholders; it's quite another to say that duty imposes an affirmative obligation to screw others over to the maximum extent possible in order to profit the constituency to which you owe those duties.  The latter does not necessarily follow from the former, and absent a citation to some authority actually standing for that proposition, I remain quite skeptical.  Again, I'm not saying directors have carte blanche to disregard the economic interests of their shareholders, which I agree is their principal duty; merely that it is tempered by reason in ways you don't seem to acknowledge.

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