North Carolina § 55A-8-42 - Standards of conduct for officers.

§ 55A-8-42. Standards of conduct for officers.

An officer with discretionary authority shall discharge his duties under that authority: In good faith; With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and In a manner the officer reasonably believes to be in the best interests of the corporation. In discharging his 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: One or more officers or employees of the corporation whom the officer reasonably believes to be reliable and competent in the matters presented; or Legal counsel, public accountants, or other persons as to matters the officer reasonably believes are within the person's professional or expert competence. An officer is not entitled to the benefit of subsection (b) of this section if the officer has actual knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) of this section unwarranted. 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 his office in compliance with this section. An officer may be entitled to immunity under Part 6 of Article 8 of this Chapter or to indemnification against liability and expenses pursuant to Part 5 of Article 8 of this Chapter. History (1985 (Reg. Sess., 1986), c. 801, s. 29; 1993, c. 398, s. 1.) NORTH CAROLINA COMMENTARY The Model Act counterpart of this section contains a provision in subsection (b) explicitly allowing reliance on ministers, priests and other religious authorities in the case of religious corporations. That provision was rejected as unnecessary because the subject is adequately covered by subdivision (b)(2). Legal Periodicals. - For article, "Duties of Nonprofit Corporate Directors - Emphasizing Oversight Responsibilities," see 90 N.C. L. Rev. 1845 (2012).