16-10a-840 - General standards of conduct for directors and officers.
16-10a-840. General standards of conduct for directors and officers.
(1) Each director shall discharge his duties as a director, including duties as a member ofa committee, and each officer with discretionary authority shall discharge his duties under thatauthority:
(a) in good faith;
(b) with the care an ordinarily prudent person in a like position would exercise undersimilar circumstances; and
(c) in a manner the director or officer reasonably believes to be in the best interests of thecorporation.
(2) In discharging his duties, a director or officer is entitled to rely on information,opinions, reports, or statements, including financial statements and other financial data, ifprepared or presented by:
(a) one or more officers or employees of the corporation whom the director or officerreasonably believes to be reliable and competent in the matters presented;
(b) legal counsel, public accountants, or other persons as to matters the director or officerreasonably believes are within the person's professional or expert competence; or
(c) in the case of a director, a committee of the board of directors of which he is not amember, if the director reasonably believes the committee merits confidence.
(3) A director or officer is not acting in good faith if he has knowledge concerning thematter in question that makes reliance otherwise permitted by Subsection (2) unwarranted.
(4) A director or officer is not liable to the corporation, its shareholders, or anyconservator or receiver, or any assignee or successor-in-interest thereof, for any action taken, orany failure to take any action, as an officer or director, as the case may be, unless:
(a) the director or officer has breached or failed to perform the duties of the office incompliance with this section; and
(b) the breach or failure to perform constitutes gross negligence, willful misconduct, orintentional infliction of harm on the corporation or the shareholders.
Amended by Chapter 266, 1993 General Session