Tennessee § 48-58-403 - Standards of conduct for officers.

§ 48-58-403. Standards of conduct for officers.

An officer with discretionary authority shall discharge all 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 such 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 (1) 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. The duty of an officer includes the obligation to inform: The superior officer to whom, or the board of directors or the committee thereof to which, the officer reports, of information about the affairs of the nonprofit corporation known to the officer, within the scope of the officer's functions and known to the officer to be material to the superior officer, board or committee; and The officer's superior officer, or another appropriate person within the nonprofit corporation, or the board of directors, or a committee thereof, of any action or probable material violation of law involving the corporation or material breach of duty to the corporation by an officer, employee, or agent of the corporation, that the officer believes has occurred or is likely to occur. An officer is not acting in good faith if the officer has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) 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 office in compliance with this section. Acts 1987, ch. 242, § 8.42; 2014, ch. 899, § 42.