48-18-301 - General standards for directors. - Tennessee Statutes

48-18-301. General standards for directors.

(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.

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