§ 16-6a-822 — General standards of conduct for directors and officers.

Utah § 16-6a-822

• Jurisdiction: Utah
• Title 16: Corporations
• Ch. 16-6a: Utah Revised Nonprofit Corporation Act
• Part 16-6a-8: Directors and Officers

Text

(1) (1)(a) A director shall discharge the director's duties as a director, including the director's duties as a member of a committee of the board, in accordance with Subsection (2).
(1)(b) An officer with discretionary authority shall discharge the officer's duties under that authority in accordance with Subsection (2).
(2) A director or an officer described in Subsection (1) shall discharge the director or officer's duties:

(2)(a) in good faith;
(2)(b) with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and
(2)(c) in a manner the director or officer reasonably believes to be in the best interests of the nonprofit corporation.
(3) In discharging duties, a director or officer is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:

(3)(a) one or more officers or employees of the nonprofit corporation whom the director or officer reasonably believes to be reliable and competent in the matters presented;
(3)(b) legal counsel, a public accountant, or another person as to matters the director or officer reasonably believes are within the person's professional or expert competence;
(3)(c) religious authorities or ministers, priests, rabbis, or other persons:
(3)(c)(i) whose position or duties in the nonprofit corporation, or in a religious organization with which the nonprofit corporation is affiliated, the director or officer believes justify reliance and confidence; and
(3)(c)(ii) who the director or officer believes to be reliable and competent in the matters presented; or
(3)(d) in the case of a director, a committee of the board of directors of which the director is not a member if the director reasonably believes the committee merits confidence.
(4) A director or officer is not acting in good faith if the director or officer has knowledge concerning the matter in question that makes reliance otherwise permitted by Subsection (3) unwarranted.
(5) A director, regardless of title, may not be considered to be a trustee with respect to any property held or administered by the nonprofit corporation including property that may be subject to restrictions imposed by the donor or transferor of the property.
(6) A director or officer is not liable to the nonprofit corporation, its members, or any conservator or receiver, or any assignee or successor-in-interest of the nonprofit corporation or member, for any action taken, or any failure to take any action, as an officer or director, as the case may be, unless:

(6)(a) the director or officer has breached or failed to perform the duties of the office as set forth in this section; and
(6)(b) the breach or failure to perform constitutes:
(6)(b)(i) willful misconduct; or
(6)(b)(ii) intentional infliction of harm on:

(6)(b)(ii)(A) the nonprofit corporation; or
(6)(b)(ii)(B) the members of the nonprofit corporation; or
(6)(b)(iii) gross negligence.

Legislative History

Amended by Chapter 306, 2007 General Session