This Unit concerns the management of corporations. One of the new concepts we have is the "business judgment rule," which limits liability of directors and officers when they act with care and good faith. In short, if directors and officers make a reasonable investigation before making any corporate decision, they will not be held liable for the results, even if their decision was determined (in hindsight) as wrong. There are three requirements: 1) an informed decision; 2) no conflict of interest; and 3) a rational basis for the decision. Sounds simple -- but let's see if we can apply it. There is a medical device company that has FDA approval for use of a bone cement to be used in both the skull and the arm. However, the real growth potential for the cement is use in spinal fusion surgery. FDA trials for use in the spine will take many years to complete; however, there is another path available. Doctors are always free to develop new methods for medical products (many of the innovations that occur in medicine occur from doctors "off label" use of medical drugs, equipment and procedures). The Board of Directors has been informed that their salespeople are recommending to doctors to use the bone cement for spinal fusion surgery. However the final decision on whether to use the bone cement is made by the doctors, not the medical salespeople. The medical salespeople are not present in the operating room, and merely recommend the "off label use" during their regular visits to the doctors promoting the bone cement. What duty, if any, does the Board of Directors have under the "business Judgment rule" in this situation? What information, if any, does the Board of Directors need to obtain before approving the medical sales procedures outlined above? How should the Board of Directors move forward?