Current through the 2024 Fourth Special Session
Section 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 the director'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 that authority in accordance with Subsection (2).(2) A director or an officer described in Subsection (1) shall discharge the director or officer's duties: (b) with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and(c) in a manner the director or officer reasonably believes to be in the best interests of the nonprofit 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 or presented by: (a) one or more officers or employees of the nonprofit corporation whom the director or officer 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 or officer 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 organization with which the nonprofit corporation is affiliated, the director or officer believes justify reliance and confidence; and(ii) who the director or officer believes to be reliable and competent in the matters presented; or(d) in the case of a director, a committee of the board of directors of which the director is not 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 has knowledge concerning the matter in question that makes reliance otherwise permitted by Subsection (3) unwarranted.(5) A director, regardless of title, may not be considered to be a trustee with respect to any property held or administered by the nonprofit corporation including property that may be subject 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 any conservator or receiver, or any assignee or successor-in-interest of the nonprofit corporation or member, for any action taken, or any 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 as set forth 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; orAmended by Chapter 306, 2007 General Session.