§ 48-18-301 — General standards for directors

Tennessee § 48-18-301

• Jurisdiction: Tennessee
• Title: 48

Text

(a) A director shall discharge all duties as a director, including duties as a member of a committee: (1) In good faith; (2) With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and (3) In a manner the director reasonably believes to be in the best interests of the corporation. (b) In discharging such duties, a director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by: (1) One (1) or more officers or employees of the corporation (or a subsidiary of the corporation) whom the director reasonably believes to be reliable and competent in the matters presented; (2) Legal counsel, public accountants, or other persons as to matters the director reasonably believes are within the person's professional or expert competence; or (3) A committee of the board of directors of which the director is not a member, if the director reasonably believes the committee merits confidence. (c) A director is not acting in good faith if the director has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) unwarranted. (d) A director is not liable for any action taken as a director, or any failure to take any action, if the director performed the duties of the office in compliance with this section.

Legislative History

Acts 1986, ch. 887, § 8.30; 1994, ch. 776, § 32.