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2019 Kentucky Revised Statutes
Chapter 271B - Business corporations
Subtitle 271B.8 - Directors and Officers
271B.8-300 General standards for directors -- Directors of a public benefit corporation.

Universal Citation: KY Rev Stat § 271B.8-300 (2019)
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271B.8-300 General standards for directors -- Directors of a public benefit corporation. (1) (2) (3) (4) (5) (6) (7) (8) A director shall discharge his duties as a director, including his duties as a member of a committee: (a) In good faith; (b) On an informed basis; and (c) In a manner he honestly believes to be in the best interests of the corporation. A director shall be considered to discharge his duties on an informed basis if he makes, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, inquiry into the business and affairs of the corporation, or into a particular action to be taken or decision to be made. In discharging his 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 (1) or more officers or employees of the corporation whom the director honestly believes to be reliable and competent in the matters presented; (b) Legal counsel, public accountants, or other persons as to matters the director honestly believes are within the person's professional or expert competence; or (c) A committee of the board of directors of which he is not a member, if the director honestly believes the committee merits confidence. A director shall not be considered to be acting in good faith if he has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (3) of this section unwarranted. In addition to any other limitation on a director's liability for monetary damages contained in any provision of the corporation's articles of incorporation adopted in accordance with subsection (2)(d) of KRS 271B.2-020, any action taken as a director, or any failure to take any action as a director, shall not be the basis for monetary damages or injunctive relief unless: (a) The director has breached or failed to perform the duties of the director's office in compliance with this section; and (b) In the case of an action for monetary damages, the breach or failure to perform constitutes willful misconduct or wanton or reckless disregard for the best interests of the corporation and its shareholders. A person bringing an action for monetary damages under this section shall have the burden of proving by clear and convincing evidence the provisions of subsection (5)(a) and (b) of this section, and the burden of proving that the breach or failure to perform was the legal cause of damages suffered by the corporation. Nothing in this section shall eliminate or limit the liability of any director for any act or omission occurring prior to July 15, 1988. In a public benefit corporation: (a) (b) (c) (d) The board of directors shall manage or direct the business and affairs of the public benefit corporation in a manner that balances the pecuniary interests of the stockholders, the best interests of those materially affected by the corporation's conduct, and the specific public benefit or public benefits identified in its articles of incorporation; A director of the public benefit corporation shall not, by virtue of the public benefit provisions set forth in the corporation's articles of incorporation, have any duty to any person on account of any interest of the person in the public benefit or public benefits identified in the articles of incorporation or on account of any interest materially affected by the corporation's conduct; With respect to a decision implicating the balance requirement in paragraph (a) of this subsection, a director shall act in conformity with subsection (1) of this section; and The articles of incorporation of a public benefit corporation may include a provision that any disinterested failure to satisfy this subsection shall not constitute an act or omission not in good faith or a breach of the duty of loyalty. Effective:June 29, 2017 History: Amended 2017 Ky. Acts ch. 28, sec. 7, effective June 29, 2017. -- Created 1988 Ky. Acts ch. 23, sec. 85, effective January 1, 1989; and ch. 224, sec. 8, effective July 15, 1988. Formerly codified as KRS 271A.202.
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