Corporate law requires directors to take only those decisions that they honestly believe (in good faith) will serve the “best interest of the company as a whole”.
For long it was considered that a company is collective of shareholders and, therefore, the best interest of shareholders is the best interest of the company. However, in some jurisdictions, courts are taking the view that a company is a legal entity separate from shareholders and, therefore, the “best interest of the company as a whole” does not imply the best interest of shareholders. Directors must consider the interest of other important stakeholders,
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