48-18-403 - Standards of conduct for officers. - Tennessee Statutes

48-18-403. Standards of conduct for officers.

(a)  An officer with discretionary authority shall discharge all duties under that authority:

     (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 officer reasonably believes to be in the best interest of the corporation.

(b)  In discharging such duties, an officer 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 officer reasonably believes to be reliable and competent in the matters presented; or

     (2)  Legal counsel, public accountants, or other persons as to matters the officer reasonably believes are within the person's professional or expert competence.

(c)  An officer is not acting in good faith if the officer has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) unwarranted.

(d)  An officer is not liable for any action taken as an officer, or any failure to take any action, if the officer performed the duties of office in compliance with this section.

[Acts 1986, ch. 887, § 8.42; 1994, ch. 776, § 34.]