The Role and Application of Business Judgment Rule—Some Extended Thoughts on the UMC Case

The Role and Application of Business Judgment Rule—Some Extended Thoughts on the UMC Case

 

Title
The Role and Application of Business Judgment Rule—Some Extended Thoughts on the UMC Case
Author
Ching-Ping Shao
Keywords
Business Judgment Rule, Fiduciary Duty, Burden of Proof, Shareholder Ratification, Duty of Loyalty
Abstract
Whether the business judgment rule (“BJR”) should be imported into Taiwan’s
corporate directors’ civil liability regime has been fiercely debated among
scholars and practitioners. It is surprisingly noted that white collar crime defense
attorneys also try to employ the BJR to protect their clients from criminal liability.
Inspired by the attention-grabbing UMC case, this article seeks to offer some different
thoughts on related issues. This article believes, contrary to the received
wisdom, the plaintiff bears the burden of proof on the director’s breach of fiduciary
duty under the no-BJR regime. As a result, the importation of the BJR will increase,
but not shift, the burden for the plaintiff to state their claims. This view will
not only weaken the case against the legal transplantation but clarify the role the
BJR can play in the criminal prosecution on violations of the Article 342 of the
Criminal Code. The discussion also sheds light on the impact of shareholder ratification on the determination of criminal liability and offers some guides for prosecutors
and litigants to build their cases.
Abstract Article

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