3-1-13.3 - General standards of conduct for directors and officers.
3-1-13.3. General standards of conduct for directors and officers.
(1) A director shall perform his duties as a director, and as a member of a committee, andeach officer with discretionary authority shall perform his duties under that authority:
(a) in good faith;
(b) with the care an ordinarily prudent person in a similar position would exercise undersimilar circumstances; and
(c) in a manner the director or officer reasonably believes to be in the best interests of theassociation.
(2) In performing his duties, a director or officer may rely on information, opinions,reports, or statements, including financial statements and other financial data, if prepared orpresented by:
(a) one or more officers or employees of the association 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 that makesreliance otherwise permitted by Subsection (2) unwarranted.
(4) A director or officer is not liable to the association, its members, or any conservator orreceiver, or any assignee or successor-in-interest thereof, for any action taken, or any failure totake any action, as an officer or director 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 association or the members.
Enacted by Chapter 204, 1994 General Session