General standards of conduct for directors and officers.

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(1) Each director shall discharge the director's duties as a director, including the director's duties as a member of a committee, and each officer with discretionary authority shall discharge the officer's duties under that authority:

  1. In good faith;

  2. With care; and

  3. In a manner the director or officer reasonably believes to be in the best interests ofthe corporation.

(2) In discharging duties under this section, 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:

  1. One or more officers or employees of the corporation whom the director or officerreasonably believes to be reliable and competent with respect to the information, opinions, reports, or statements;

  2. One or more legal counsel, accountants, or other persons retained by the corporationas to matters involving expertise or skills the director or officer reasonably believes are within the person's professional or expert competence;

  3. 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; or

  4. In the case of an officer, the board of directors or any committee of the board ofdirectors.

  1. A director or officer may not rely on information, opinion, reports, or statements aspermitted by subsection (2) of this section if the director or officer has knowledge concerning the matter in question that makes the reliance unwarranted.

  2. A director or officer of a corporation, in the performance of duties in that capacity,does not have any fiduciary duty to any creditor of the corporation arising only from the status as a creditor, whether the corporation is solvent or insolvent.

Source: L. 2019: Entire part amended with relocations, (SB 19-086), ch. 166, p. 1930, § 35, effective July 1, 2020.

Editor's note: This section is similar to former § 7-108-401 as it existed prior to July 1, 2020.


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