Your law firm represents MegaMajor Corp. (Mega Major), a Delaware corporation. The partner you work for is traveling and has asked that you attend MegaMajors board meeting in her place. At the meeting Rodney Rench, the strong-willed MegaMajor Chairman and CEO, proposed that the company proceed now with construction of the Rodney Rench Museum adjacent to MegaMajors headquarters in downtown Pittsburgh. The Museum would house Rodneys art collection and make it accessible to the public. The collection includes more than 100 works by masters such as Rembrandt, DaVinci, Renoir, and Van Gogh. The MegaMajor board of directors thoroughly discussed the project at two prior board meetings. There has been spirited debate on the board for and against the project. MegaMajors tax counsel has opined to the board that the estimated $90 million that the company will spend on construction of the museum (16% of this years $575 million in profits) will constitute a tax-deductible charitable contribution. MegaMajors name will be displayed appropriately on the building as the donor. Recognizing that he has a conflict of interest, Rodney has not participated (very much) in the discussions and has recused himself from the final vote, which the board proposes to take today.

News of the proposed Rodney Rench Museum was reported previously in the Pittsburgh Business Gazette, in which a MegaMajor shareholder commentator said, among other things: Here he goes again. Another grandiose Rench scheme. Its foolish. A waste of corporate assets. Mismanagement.

The board is looking at you. You know that there are shareholders who will be interested in bringing a lawsuit against the directors for breach of the duty of care, so:

(a) How does the Business Judgment Rule work into a brief assessment of this claim for the board members; and

(b) Do you (yes, you counsel) clear them legally to go ahead? Yes or no, on what specific basis?