Luke, Maddi and Emily Are the Directors of a Company

Multiple Choice

Luke, Maddi and Emily are the directors of a company that creates mobile phone apps called Angry Nerd Ltd. The board passed a resolution to retain an outside programmer to help with an app they were developing. The programmer did a poor job and the app was substandard. This caused the company to suffer reputational damage and this caused financial loss. Luke, Maddi and Emily are concerned they might by pursued for breaching their duty of care, skill and diligence. They would be able to rely on the business judgment rule in section 180(2) of the Corporation Act as a defence to any claim if:

A) The decision was a business judgment as defined in section 180(3) ;
B) The decision was made in good faith for a proper purpose;
C) They did not have a material personal interest in the decision;
D) They reasonably informed themselves about the subject matter of the decision to the extent they reasonably believed to be appropriate;
E) They rationally believed that the decision was in the best interest of the company;
F) All the foregoing is necessary to be established.