Allegations Against Directors & Officers
Most allegations involve decisions, acts, errors or omissions that have lowered stock values, compromised competitive industry position, wasted corporate assets, or overlooked significant growth or investment opportunities. These can result in financial injury to stockholders, employees, investors, and any other third party.
In the past, Directors & Officers were somewhat protected from liability due to the business judgment rule, particularly in the question of duty of care. That is, if they acted in the best interest of the company and with due care, honest and reasonable belief, good faith and without a conflict of interest they were not considered at fault. Unfortunately, today, the judgment rule has lost much of its effect.