Source: https://www.yokasmith.com/newsroom-articles-15
Timestamp: 2019-04-22 00:44:14+00:00

Document:
An ordinarily prudent person, knowing what the director knew at that time, would not have acted similarly under the circumstances.
Frances T. v. Village Green Owners Association, 42 Cal.3d 490, 504 (1986).
Although, most typically, officer or director liability in tort is found in the context of an intentional tort, it should be noted that the above standard applies to both intentional and negligent torts.
All persons, regardless of whether they are officers or directors of a corporation, are liable for their participation in an intentional tort. PMC v. Kadisha, supra at 1378, 1381. It has been held that "[t]his rule applies to intentional torts committed by shareholders and those acting in their official capacities as officers and directors of a corporation, even though the corporation is also liable", and it is well-established that corporate officers and directors may be found personally liable for damages caused by their own fraudulent conduct.
A corporate officer or agent is personally liable for damages caused by his fraud or deceit, to the person directly injured thereby. As to third persons dealing with a corporation, the directors are merely agents of the corporation, their liability being the same, and if they assist or participate knowingly or recklessly without knowledge, in obtaining property by fraud or deceit, they are liable to an injured person who relies on their representations.
Provident Land Corp. v. Bartlett , 72 Cal. App. 2d 672, 687-88 (1946); Croeni v. Goldstein, 55 Cal. App. 4th 754, 758 (1994).
Where the acts or omissions involve a question of policy or business judgment, a director can only be held liable with a showing of fraud, bad faith or negligence. Findley v. Garrett, (1952) 109 Cal.App.2d 166, 178. The standard of care for a director is that the director's duties must be performed in "good faith" and in a manner the director believes to be in the best interests of the corporation and with the care, including reasonable inquiry, that an ordinary prudent person in a like position would exercise under similar circumstances. Cal. Corp. Code § 309(a).
Similarly, it has been held that an officer or director can be individually liable for conversion to one whose money or property has been misappropriated or converted by him or her to the uses of the corporation, even where he or she derived no personal benefit therefrom and acted merely as an agent of the corporation. Granoll v. Yackle, 196 Cal. App. 2d 253, 257 (1961). As held in that matter, "[t]he underlying reason for this rule is that an officer should not be permitted to escape the consequences of his individual wrongdoing by saying that he acted on behalf of a corporation in which he was interested."
a distinction must be made between the director's fiduciary duty to the corporation (and its beneficiaries) and the director's ordinary duty to take care not to injure third parties. The former duty is defined by statute, the latter by common law tort principles.
In that case, involving a condominium board's failure to authorize exterior lighting, allegedly resulting in plaintiff's personal injuries, the court held that only those directors who actually voted for the commission of the tort could be held personally liable.
Lastly, the Court of Appeals, in the matter of Michaelis v. Benavides, 61 Cal. App. 4th 681 (1998), did find in a manner which was contrary to the traditional distinction between pecuniary loss and personal injury for negligence liability. In that case, the court found directors liable in negligence for pecuniary loss relating to improvements to real property by rationalizing that its decision was consistent with the traditional limitations because it was "not unlikely that personal injury could have resulted from the unsafe conditions of the real property." It is unclear to date whether Michaelis is an isolated decision or, rather, signals an expansion of the traditional limitations on officer and director liability.

References: v. 
 v. 
 v. 
 v. 
 v. 
 § 309
 v. 
 v.