2009 Nebraska Code
Chapter 21 CORPORATIONS AND OTHER COMPANIES
21-2095 Standards of conduct for directors.

21-2095. Standards of conduct for directors.

(1) A director shall discharge his or her duties as a director, including his or her duties as a member of a committee:

(a) In good faith;

(b) With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and

(c) In a manner he or she reasonably believes to be in the best interests of the corporation.

A director may, but need not, in considering the best interests of the corporation, consider, among other things, the effects of any action on employees, suppliers, creditors, and customers of the corporation and communities in which offices or other facilities of the corporation are located.

(2) In discharging his or her duties, a director shall be entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:

(a) One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented;

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

(c) A committee of the board of directors of which he or she is not a member if the director reasonably believes the committee merits confidence.

(3) A director shall not be considered to be acting in good faith if he or she has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (2) of this section unwarranted.

(4) A director shall not be liable for any action taken as a director, or any failure to take any action, if he or she performed the duties of his or her office in compliance with this section.

Source

Laws 1995, LB 109, § 95;
Laws 2007, LB191, § 1.

Annotations An ordinarily prudent person "in a like position", within the meaning of this section, is an ordinarily prudent person who was the director of the particular corporation. Trieweiler v. Sears, 268 Neb. 952, 689 N.W.2d 807 (2004).
The phrase "under similar circumstances", as used in this section, means that a court should take account of the director's responsibilities in the corporation, the information available at the time, and the special background knowledge or expertise the director has. Trieweiler v. Sears, 268 Neb. 952, 689 N.W.2d 807 (2004).
In a derivative action brought by a minority shareholder, the directors have the burden to establish the fairness and reasonableness of their operation of the corporation. Sadler v. Jorad, Inc., 268 Neb. 60, 680 N.W.2d 165 (2004).
In a derivative action brought by a minority shareholder, the directors were required to show that the actions they took were performed in good faith, with the care an ordinary prudent person in a like position would exercise under similar circumstances, and in a manner that they reasonably believed to be in the best interests of the corporation. Sadler v. Jorad, Inc., 268 Neb. 60, 680 N.W.2d 165 (2004).