LEGAL PROTECTION FOR THE BOARD OF DIRECTORS OF REGIONAL GOVERNMENT-OWNED ENTERPRISES MAKING INVESTMENTS WITH THIRD PARTIES THROUGH THE APPLICATION OF THE BUSINESS JUDGMENT RULE DOCTRINE

This study aims to examine whether the business judgment rule doctrine can be applied to protect the directors of Regional Government-Owned Enterprises (RGE) who engage in investment collaborations with third parties when the RGEs incurs losses. The type of research employed is normative legal research, utilizing a conceptual approach and a case approach. The study is explanatory in nature and relies on secondary data, with primary legal sources including the Limited Liability Company Law and Government Regulation No. 54 of 2017, analyzed qualitatively. In performing their duties to manage RGEs, directors are often blamed and accused of criminal corruption due to the perceived losses suffered by the RGEs as a result of their actions. Therefore, directors in managing RGEs must act in good faith and responsibly, paying careful and diligent attention to the company. They are personally accountable for any company losses if they are found guilty of or negligent in performing their duties. However, directors who perform their duties appropriately and can demonstrate that the losses incurred by the RGEs were not due to their fault or negligence can be exempted from liability for such losses through the application of the business judgment rule doctrine