A more thorough explanation:

The business judgment rule is a legal principle that provides protection to directors of a corporation from liability when they are sued for violating their duty of care to the corporation. This rule applies when the director's actions are made in good faith, with reasonable care, and with the belief that they are acting in the best interests of the corporation.

For example, if a director of a company decides to invest in a new product line, and the investment turns out to be unsuccessful, the director may be sued for violating their duty of care. However, if the director made the decision in good faith, with reasonable care, and with the belief that it was in the best interests of the corporation, the business judgment rule would protect them from liability.

The business judgment rule is a presumption in favor of the board, which means that courts will generally uphold the decisions of directors unless there is evidence of gross negligence, bad faith, or a conflict of interest. If the plaintiff can prove any of these factors, the court will not uphold the business judgment rule.

When the corporation pleads the business judgment rule, the burden of proof shifts to the plaintiff to prove that the rule does not apply. However, if the court finds that the rule does not apply, the burden shifts to the board to prove that the process and substance of the transaction was fair.