Abstract

In the context of economic globalization and increasingly complex corporate governance requirements, determining the scope of managerial liability and establishing appropriate liability exemptions for company managers, including board members and directors, are essential to encouraging innovation and reasonable risk- taking. Vietnam’s current legal framework governing liability exemptions contains several gaps and limitations, particularly the absence of a robust mechanism comparable to the business judgment rule (BJR). This article examines fundamental legal issues and liability-exemption mechanisms under Delaware law in the United States and company law in the United Kingdom. It also assesses the current state of Vietnamese law through relevant disputes and proposes recommendations for legal reform. These recommendations aim to establish a transparent legal environment that encourages innovation and promotes sustainable corporate development.

Keywords: Business judgment rule (BJR), corporate governance, D&O insurance, fiduciary duties, liability exemptions, managerial liability.