§ 490.842 — Standards of conduct for officers

Iowa § 490.842

• Jurisdiction: Iowa
• Title XII: BUSINESS ENTITIES
• Ch. 490: BUSINESS CORPORATIONS

Text

1. An officer, when performing in such capacity, has the duty to act in conformity with all
of the following:
a. In good faith.
b. With the care that a person in a like position would reasonably exercise under similar
circumstances.
c. Inamannertheofficerreasonablybelievestobeinthebestinterestsofthecorporation.
2. The duty of an officer includes the obligation to do all of the following:
a. Inform the superior officer to whom, or the board of directors or the board committee

to which, the officer reports of information about the affairs of the corporation known to the
officer, within the scope of the officer’s functions, and known to the officer to be material to
such superior officer, board, or committee.
b. Inform the officer’s superior officer, or another appropriate person within the
corporation, or the board of directors, or a board committee, of any actual or probable
material violation of law involving the corporation or material breach of duty to the
corporation by an officer, employee, or agent of the corporation, that the officer believes has
occurred or is likely to occur.
3. In discharging the officer’s duties, an officer who does not have knowledge that makes
reliance unwarranted is entitled to rely on any of the following:
a. The performance of properly delegated responsibilities by one or more employees
of the corporation whom the officer reasonably believes to be reliable and competent in
performing the responsibilities delegated.
b. Information, opinions, reports, or statements, including financial statements and other
financial data, prepared or presented by one or more employees of the corporation whom
the officer reasonably believes to be reliable and competent in the matters presented or by
legal counsel, public accountants, or other persons retained by the corporation as to matters
involving skills or expertise the officer reasonably believes are any of the following:
(1) Matters within the particular person’s professional or expert competence.
(2) Matters as to which the particular person merits confidence.
4. An officer shall not be liable to the corporation or its shareholders for any decision to
take or not to take action, or any failure to take any action, as an officer, if the duties of the
officeareperformedincompliancewiththissection. Whetheranofficerwhodoesnotcomply
with this section shall have liability will depend in such instance on applicable law, including
those principles of section 490.831 that have relevance.