In the case of General Stores Corp. v. Shlensky et al., 1955, the U.S Supreme Court was tasked with determining whether a corporation's board of directors could be held liable for losses incurred due to their decision not to insure company property against loss by fire. The court ruled in favor of the defendants (the board members), stating that they were protected under what is known as "business judgment rule". This principle shields corporate directors from liability when making business decisions on behalf of a corporation, provided those decisions are made in good faith and without conflicts of interest. Therefore, even though their choice resulted in financial loss after a fire destroyed uninsured property, because there was no evidence suggesting bad faith or conflict of interest on part of the directors while deciding against insurance coverage, they couldn't be held responsible for resultant damages.

The dissenting opinion in the case of General Stores Corp. v. Shlensky et al., argued that the majority's decision to uphold a lower court ruling, which allowed for the piercing of corporate veil and held shareholders personally liable for corporate debts, was incorrect. The dissent contended that this interpretation contradicted established principles of limited liability in corporation law and could potentially discourage investment by increasing risk to shareholders. It also suggested that such an approach might unfairly penalize innocent investors who had no knowledge or control over fraudulent activities carried out by company executives. Furthermore, it questioned whether there was sufficient evidence to prove fraud or illegality on part of the defendants as required under Illinois law for piercing corporate veil.