2022 Georgia Code
Title 14 - Corporations, Partnerships, and Associations
Chapter 2 - Business Corporations
Article 8 - Directors and Officers
Part 3 - Standards of Conduct
§ 14-2-830. General Standards for Directors; Presumption of Good Faith and Ordinary Care

1. A director shall perform his or her duties as a director in good faith and with the degree of care an ordinarily prudent person in a like position would exercise under similar circumstances.
2. In performing his or her duties a director may rely upon:
   1. Other officers, employees, or agents of the corporation whom the director reasonably believed to be reliable and competent in the functions performed; and
   2. Information, data, opinions, reports, or statements provided by officers, employees, agents of the corporation, legal counsel, public accountants, investment bankers, or other persons as to matters involving the skills, expertise, or knowledge reasonably believed to be reliable and within such person’s professional or expert competence.
3. There shall be a presumption that the process a director followed in arriving at decisions was done in good faith and that such director has exercised ordinary care; provided, however, that this presumption may be rebutted by evidence that such process constitutes gross negligence by being a gross deviation of the standard of care of a director in a like position under similar circumstances.
4. Nothing contained in this Code section shall:
   1. In any instance when fairness is at issue, such as consideration of the fairness of a transaction to the corporation as evaluated under paragraph (3) of subsection (b) of Code Section 14-2-861, alter the burden of proving the fact or lack of fairness otherwise applicable;
   2. Alter the fact or lack of liability of a director under the Official Code of Georgia Annotated, including the governance of the consequences of an unlawful distribution under Code Section 14-2-832 or a conflicting interest transaction under Code Section 14-2-861;
   3. Affect any rights to which the corporation or its shareholders may be entitled under another law of this state or of the United States; or
   4. Deprive a director of the applicability, effect, or protection of the business judgment rule.

History. Code 1981, § 14-2-830 , enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 2017, p. 693, § 2/HB 192.

The 2017 amendment, effective July 1, 2017, rewrote this Code section. See Editor’s notes for applicability.

Cross references.

Duty of board of directors in protecting insureds, creditors and the general public regarding investments, § 33-11-54 .

Editor’s notes.

Ga. L. 2017, p. 693, § 4/HB 192, not codified by the General Assembly, provides that: “This Act shall apply only to causes of action arising on or after July 1, 2017.”

Law reviews.

For article discussing corporation director’s liability for improper payments to shareholders, see 3 Ga. L. Rev. 11 (1968).

For article discussing liability of corporate directors, officers, and shareholders under the Georgia Business Corporation Code, and as affected by provisions of the Georgia Civil Practice Act, see 7 Ga. St. B.J. 277 (1971).

For article, “Corporate Governance in the Aftermath of the Insurance Crisis,” see 39 Emory L.J. 1155 (1990).

For article, “Some Distinctive Features of the Georgia Business Corporation Code,” 28 Ga. St. B. J. 101 (1991).

For comment, “Poison Pills: Are Dead Hand Pills Dead in Georgia?,” see 50 Mercer L. Rev. 809 (1999).

For survey article on trial practice and procedure, see 59 Mercer L. Rev. 423 (2007).

For annual review of Georgia Corporation and Business Organization Law, see 15 (No. 7) Ga. St. B. J. 20 (2010).

For annual survey of law on business associations, see 62 Mercer L. Rev. 41 (2010).

For article, “2013 Georgia Corporation and Business Organization Case Law Developments,” see 19 Ga. St. B.J. 28 (April 2014).

For article, “Excessive Corporate Risk-Taking and the Decline of Personal Blame,” see 65 Emory L.J. 533 (2015).

For article, “2014 Georgia Corporation and Business Organization Case Law Developments,” see 20 Ga. St. B. J. 26 (April 2015).

For article on the 2017 amendment of this Code section, see 34 Ga. St. U.L. Rev. 1 (2017).

For annual survey on trial practice and procedure, see 69 Mercer L. Rev. 321 (2017).

For annual survey on business associations, see 70 Mercer L. Rev. 19 (2018).

For article with annual survey on business associations, see 73 Mercer L. Rev. 29 (2021).