Colorado § 7-101-506 Duties of directors

Colorado Statutes

§ 7-101-506 — Duties of directors

Colorado·Title 07 Corporations·Art. General Provisions - Business Corporations

(1)The board of directors shall manage or direct the business and affairs of a public benefit corporation in a manner that balances the pecuniary interests of the shareholders, the best interests of those materially affected by the corporation's conduct, and the specific public benefit identified in its articles of incorporation.

(2)A director of a public benefit corporation:

(a)Does not, by virtue of the public benefit provisions of section 7-101-503

(1), have a duty to any person on account of an interest of the person in the public benefit identified in the articles of incorporation or on account of an interest materially affected by the corporation's conduct; and

(b)With respect to a decision implicating the balance requirement in subsection (1) of this section, will be

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(1) The board of directors shall manage or
direct the business and affairs of a public benefit corporation in a manner that
balances the pecuniary interests of the shareholders, the best interests of those
materially affected by the corporation's conduct, and the specific public benefit
identified in its articles of incorporation.

(2) A director of a public benefit corporation:

(a) Does not, by virtue of the public benefit provisions of section 7-101-503
(1), have a duty to any person on account of an interest of the person in the public
benefit identified in the articles of incorporation or on account of an interest
materially affected by the corporation's conduct; and

(b) With respect to a decision implicating the balance requirement in
subsection (1) of this section, will be deemed to satisfy the director's fiduciary
duties to shareholders and the corporation if the director's decision is both
informed and disinterested and not such that no person of ordinary, sound
judgment would approve.

(3) For the purposes of this section, a director's ownership of or other
interest in the stock of a public benefit corporation does not, alone, create a
conflict of interest on the part of the director with respect to the director's decision
implicating the balancing requirement in subsection (1) of this section, except to the
extent that the ownership or interest would create a conflict of interest if the
corporation was not a public benefit corporation. In the absence of a conflict of
interest, a failure to satisfy the balancing requirement specified in subsection (1) of
this section does not, for the purposes of section 7-108-401 or 7-108-403 or article
109 of this title 7, constitute an act or omission that is not in good faith or a breach
of the duty of loyalty.

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Legislative History

Source: L. 2013: Entire part added, (HB 13-1138), ch. 230, p. 1102, � 1, effective April 1, 2014. L. 2017: (3) amended, (HB 17-1200), ch. 386, p. 2001, � 3, effective August 9. L. 2019: (3) amended, (SB 19-086), ch. 166, p.1965, � 66, effective July 1, 2020. L. 2022: (3) amended, (SB 22-045), ch. 33, p. 184, � 2, effective August 10.