TITLE 7

Corporations, Associations, and Partnerships

CHAPTER 7-5.3

Benefit Corporations

SECTION 7-5.3-7



   § 7-5.3-7  Standard of conduct for

directors. –

(a) In discharging the duties of their respective positions and in considering

the best interests of the benefit corporation, the board of directors,

committees of the board, and individual directors of a benefit corporation:



   (1) Shall consider the effects of any action or inaction upon:



   (i) The shareholders of the benefit corporation;



   (ii) The employees and work force of the benefit corporation,

its subsidiaries, and its suppliers;



   (iii) The interests of customers as beneficiaries of the

general public benefit or specific public benefit purposes of the benefit

corporation;



   (iv) Community and societal factors, including those of each

community in which offices or facilities of the benefit corporation, its

subsidiaries, or its suppliers are located;



   (v) The local and global environment;



   (vi) The short-term and long-term interests of the benefit

corporation, including benefits that may accrue to the benefit corporation from

its long-term plans and the possibility that these interests may be best served

by the continued independence of the benefit corporation; and



   (vii) The ability of the benefit corporation to accomplish

its general public benefit purpose and any specific public benefit purpose; and



   (2) May consider other pertinent factors or the interests of

any other group that they deem appropriate; but



   (3) Need not give priority to the interests of a particular

person or group referred to in subdivision (1) or (2) over the interests of any

other person or group unless the benefit corporation has stated in its articles

of incorporation its intention to give priority to certain interests related to

its accomplishment of its general public benefit purpose or of a specific

public benefit purpose identified in its articles.



   (b) The consideration of interests and factors in the manner

required by subsection (a) does not constitute a violation of § 7-1.2-801.



   (c) Except as provided in the articles of incorporation, a

director is not personally liable for monetary damages for:



   (1) Any action or inaction in the course of performing the

duties of a director under subsection (a) if the director performed the duties

of office in compliance with § 7-1.2-801 and this section; or



   (2) Failure of the benefit corporation to pursue or create a

general public benefit or a specific public benefit.



   (d) A director does not have a duty to a person that is a

beneficiary of the general public benefit purpose or a specific public benefit

purpose of a benefit corporation arising from the status of the person as a

beneficiary.



   (e) A director who makes a business judgment in good faith

fulfills the duty under this section if the director:



   (1) Is not interested in the subject of the business judgment;



   (2) Is informed with respect to the subject of the business

judgment to the extent the director reasonably believes to be appropriate under

the circumstances; and



   (3) Rationally believes that the business judgment is in the

best interests of the benefit corporation.



History of Section.

(P.L. 2013, ch. 487, § 1; P.L. 2013, ch. 500, § 1.)