Tennessee § 48-18-301 - General standards for directors.

§ 48-18-301. General standards for directors.

A director shall discharge all duties as a director, including duties as a member of a committee: In good faith; With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and In a manner the director reasonably believes to be in the best interests of the corporation. In discharging such duties, a director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by: One (1) or more officers or employees of the corporation (or a subsidiary of the corporation) whom the director reasonably believes to be reliable and competent in the matters presented; Legal counsel, public accountants, or other persons as to matters the director reasonably believes are within the person's professional or expert competence; or A committee of the board of directors of which the director is not a member, if the director reasonably believes the committee merits confidence. A director is not acting in good faith if the director has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) unwarranted. A director is not liable for any action taken as a director, or any failure to take any action, if the director performed the duties of the office in compliance with this section. Acts 1986, ch. 887, § 8.30; 1994, ch. 776, § 32. Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 506. Law Reviews. Corporate Directors [and Officers] Making Business Judgments in Tennessee: The Business Judgment Rule, 44 U. Mem. L. Rev. 455 (2013). Delaware LLCs for Tennessee Lawyers? (Richard Spore), 35 Tenn. B.J. 27 (1999). The Conundrum of Directors' Duties in Nearly Insolvent Corporations (Mike Roberts), 23 Mem. St. U.L. Rev. 273 (1993).