§ 28-13-11-6 — Legislative intent; business judgment and discretion of directors; corporate takeovers

Indiana § 28-13-11-6

• Jurisdiction: Indiana
• Art. 13: CORPORATE GOVERNANCE
• Ch. 11: Standards of Conduct for Directors

Text

(a) In enacting this article, the general
assembly established corporate governance rules for Indiana
corporations, including in this chapter the standards of conduct
applicable to directors of Indiana corporations, and the corporate
constituent groups and interests that a director may take into account
in exercising the director's business judgment. The general assembly
intends to reaffirm certain of these corporate governance rules to
ensure that the directors of Indiana corporations, in exercising their
business judgment, are not required to approve a proposed corporate
action if the directors in good faith determine, after considering and
weighing as they consider appropriate the effects of the action on the
corporation's constituents, that the action is not in the best interests of
the corporation.
(b) In making a determination under this section, directors are not
required to consider the effects of a proposed corporate action on any
particular corporate constituent group or interest as a dominant or
controlling factor. Without limiting the generality of this section,
directors are not required to redeem any rights under or to make
inapplicable a shareholder rights plan adopted under IC 28-13-2-5, or
to take or decline to take any other action under this article, solely
because of the effect such action might have on a proposed acquisition
of control of the corporation or the amounts that might be paid to
shareholders under the acquisition.
(c) Certain judicial decisions in Delaware and other jurisdictions,
which might otherwise be looked to for guidance in interpreting the
duties of directors of corporations, including decisions relating to
potential change of control transactions that impose a different or
higher degree of scrutiny on actions taken by directors in response to
a proposed acquisition of control of the corporation, are inconsistent
with the proper application of the business judgment rule under this
article. Therefore, the general assembly intends:
(1) to reaffirm that this section allows directors the full discretion
to weigh the factors enumerated in section 4 of this chapter as
they consider appropriate; and
(2) to protect both directors and the validity of corporate action
taken by the directors in the good faith exercise of their business
judgment after reasonable investigation.

Legislative History

As added by P.L.14-1992, SEC.163.