16-6a-822 - General standards of conduct for directors and officers.

16-6a-822. General standards of conduct for directors and officers.
(1) (a) A director shall discharge the director's duties as a director, including thedirector's duties as a member of a committee of the board, in accordance with Subsection (2).
(b) An officer with discretionary authority shall discharge the officer's duties under thatauthority in accordance with Subsection (2).
(2) A director or an officer described in Subsection (1) shall discharge the director orofficer's duties:
(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 thenonprofit corporation.
(3) In discharging duties, a director or officer is entitled to 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 nonprofit corporation whom the director orofficer reasonably believes to be reliable and competent in the matters presented;
(b) legal counsel, a public accountant, or another person as to matters the director orofficer reasonably believes are within the person's professional or expert competence;
(c) religious authorities or ministers, priests, rabbis, or other persons:
(i) whose position or duties in the nonprofit corporation, or in a religious organizationwith which the nonprofit corporation is affiliated, the director or officer believes justify relianceand confidence; and
(ii) who the director or officer believes to be reliable and competent in the matterspresented; or
(d) in the case of a director, a committee of the board of directors of which the director isnot a member if the director reasonably believes the committee merits confidence.
(4) A director or officer is not acting in good faith if the director or officer hasknowledge concerning the matter in question that makes reliance otherwise permitted bySubsection (3) unwarranted.
(5) A director, regardless of title, may not be considered to be a trustee with respect toany property held or administered by the nonprofit corporation including property that may besubject to restrictions imposed by the donor or transferor of the property.
(6) A director or officer is not liable to the nonprofit corporation, its members, or anyconservator or receiver, or any assignee or successor-in-interest of the nonprofit corporation ormember, for any action taken, or any failure to take any action, as an officer or director, as thecase may be, unless:
(a) the director or officer has breached or failed to perform the duties of the office as setforth in this section; and
(b) the breach or failure to perform constitutes:
(i) willful misconduct; or
(ii) intentional infliction of harm on:
(A) the nonprofit corporation; or
(B) the members of the nonprofit corporation; or
(iii) gross negligence.


Amended by Chapter 306, 2007 General Session