§ 33-756 — General standards of conduct for directors.

Connecticut § 33-756

• Jurisdiction: Connecticut
• Title 33: Corporations
• Ch. 601: Business Corporations

Text

(a) Each member of the board of directors, when discharging the duties of a director, shall act: (1) In good faith; and (2) in a manner the director reasonably believes to be in the best interests of the corporation. (b) The members of the board of directors or a board committee, when becoming informed in connection with their decision-making function or devoting attention to their oversight function, shall discharge their duties with the care that a person in a like position would reasonably believe appropriate under similar circumstances. (c) In discharging board or committee duties, a director shall disclose, or cause to be disclosed, to the other board or committee members information not already known by them but known by the director to be material to the discharge of their decision-making or oversight functions, except that disclosure is not required to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule. (d) In discharging board or committee duties, a director who does not have knowledge that makes reliance unwarranted is entitled to rely on the performance by any of the persons specified in subdivision (1) or (3) of subsection (f) of this section to whom the board may have delegated, formally or informally by course of conduct, the authority or duty to perform one or more of the board's functions that are delegable under applicable law. (e) In discharging board or committee duties, a director who does not have knowledge that makes reliance unwarranted is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, prepared or presented by any of the persons specified in subsection (f) of this section. (f) A director is entitled to rely, in accordance with subsection (d) or (e) of this section, on: (1) One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the functions performed or the information, opinions, reports or statements provided; (2) legal counsel, public accountants or other persons retained by the corporation as to matters involving skills or expertise the director reasonably believes are matters (A) within the particular person's professional or expert competence, or (B) as to which the particular person merits confidence; or (3) a board committee of which the director is not a member if the director reasonably believes the committee merits confidence. (g) For the purposes of sections 33-817 , 33-830 , 33-831 , 33-841 and 33-844 , a director of a corporation that has a class of voting stock registered pursuant to Section 12 of the Securities Exchange Act of 1934, as the same has been or hereafter may be amended from time to time, in addition to complying with the provisions of subsections (a) to (c), inclusive, of this section, may consider, in determining what the director reasonably believes to be in the best interests of the corporation, (1) the long-term as well as the short-term interests of the corporation, (2) the interests of the shareholders, long-term as well as short-term, including the possibility that those interests may be best served by the continued independence of the corporation, (3) the interests of the corporation's employees, customers, creditors and suppliers, and (4) community and societal considerations, including those of any community in which any office or other facility of the corporation is located. A director may also consider, in the discretion of such director, any other factors the director reasonably considers appropriate in determining what the director reasonably believes to be in the best interests of the corporation.

Legislative History

(P.A. 94-186, S. 100, 215; P.A. 10-35, S. 10; P.A. 14-217, S. 156; P.A. 17-108, S. 1.) History: P.A. 94-186 effective January 1, 1997; P.A. 10-35 amended Subsec. (d) to substitute “may” for “shall” re director's consideration of factors in Subdivs. (1) to (4) in determining what he reasonably believes to be in best interests of corporation; P.A. 14-217 added Subsec. (f) re liability of director for duties performed under Sec. 33-1358; P.A. 17-108 amended Subsec. (a) by replacing provision re director discharge of duties with provision re member of board of directors discharge of duties of director, deleting Subdiv. (2) re care of ordinarily prudent person, redesignating Subdiv. (3) as new Subdiv. (2), and making technical changes, deleted former Subsecs. (b) to (f), added new Subsec. (b) re members of board of directors or board committee discharge of duties, added new Subsec. (c) re director disclosures to board or committee members, added new Subsec. (d) re director entitled to rely on performance of persons to whom board delegated authority or duty, added new Subsec. (e) re director entitled to rely on information, opinions, reports or statements and financial data prepared by specified persons, added new Subsec. (f) re director entitled to rely on officers or employees of corporation, legal counsel, public accountants or other persons retained by corporation or board committee, and added new Subsec. (g) re considerations by director.