Business judgement rule in Czech Corporations Act

Abstract

Czech private law is currently undergoing a thorough transformation. This inclundes adoption of a brand new Corporations Act, which is to supersede the current Commercial Code. The new legislation introduces several new rules governing liability of company executive officers. One of these is business judgment rule. It should provide company executive officers with a certain level of protection against litigantion – if specific terms are met, it is presumed, that they carried out their responsibilities with proper care. I intend to demonstrate, that the czech business judgment rule is flawed, despite the fact that it draws from foreign examples and that this regulation, although seemingly groundbreaking, in fact changes nothing in examination of the decisions of the company executive officers in Czech Republic. The main goal of this article is therefore to analyze and criticize the business judgment rule in the new Czech legislation and to compare it to notable foreign legal systems. The methods used are inductive and deductive reasoning, author‘s own analysis of legal text, comparative method and compilation of available resources relating to the topic of the article