Tennessee § 48-58-301 - General standards for directors.

§ 48-58-301. 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 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; A committee of the board of directors of which the director is not a member, as to matters within its jurisdiction, if the director reasonably believes the committee merits confidence; or One (1) or more volunteers of the corporation whom the director reasonably believes to be reliable and competent in the matters presented. 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 action, if the director performed the duties of the office in compliance with this section, or if the director is immune from suit under § 48-58-601. A director shall not be deemed to be a trustee with respect to the corporation or with respect to any property held or administered by the corporation, including without limitation, property that may be subject to restrictions imposed by the donor or transferor of such property. In discharging board or committee duties a director must disclose, or cause to be disclosed, to the other board or committee members information not already known by the other board or committee members but known by the director to be material to the discharge of their decision-making or oversight functions, except that disclosure is not required to the extent that the director reasonably believes that doing so would violate a duty imposed by law, a legally enforceable obligation of confidentiality, or a professional ethics rule. A director may rely, in the case of a corporation engaged in religious activity, on religious authorities, religious leaders or other persons whose positions or duties the director reasonably believes justify reliance and confidence and whom the director believes to be reliable and competent in the matters presented. Acts 1987, ch. 242, § 8.30; 2014, ch. 899, §§ 37, 38. Law Reviews. Conversions of Nonprofit Hospitals to For-Profit Status: The Tennessee Experience, 28 U. Mem. L. Rev. 1077 (1998). Textbooks. Tennessee Jurisprudence, 7 Tenn. Juris., Corporations, §§ 57, 64, 65.