GA Code § 7-1-490 (2021)
2021 Georgia Code|Title 7 - Banking and Finance|Chapter 1 - Financial Institutions|Article 2 - Banks and Trust Companies|Part 12 - Management|§ 7-1-490. Responsibility of Directors and Officers; Delegation of Investment Decisions

  Directors and officers of a bank or trust company shall discharge the duties of their respective positions in good faith and with the degree of diligence, care, and skill which an ordinarily prudent person would exercise under similar circumstances.   In performing his or her duties, a director or officer may be entitled to rely upon:   Other officers, employees, or agents of the bank or trust company whom the director or officer reasonably believed to be reliable and competent in the functions performed; and   Information, data, opinions, reports, or statements provided by other officers, employees, agents of the bank or trust company, legal counsel, public accountants, investment bankers, or other persons as to matters involving the skills, expertise, or knowledge reasonably believed to be reliable and within such person's professional or expert competence.     There shall be a presumption that the process directors and officers followed in arriving at decisions was done in good faith and that such directors and officers have exercised ordinary care; provided, however, that this presumption may be rebutted by evidence that such process constitutes gross negligence by being a gross deviation of the standard of care of a director or officer in a like position under similar circumstances.   A bank, through its board of directors, may delegate to a correspondent bank the power to determine, within the limits set by law, the investments in which its assets, including reserve assets, may be held, provided that the bank must obtain the prior written approval of the department for such delegation.   Nothing in this Code section shall:   In any instance when fairness is at issue, such as consideration of the fairness of a transaction to the bank or trust company as evaluated under paragraph (3) of subsection (b) of Code Section 14-2-861, alter the burden of proving the fact or lack of fairness otherwise applicable;   Alter the fact or lack of liability of a director or officer under the Official Code of Georgia Annotated, including Code Sections 7-1-492 and 7-1-494;   Affect any rights to which the bank or trust company or its shareholders may be entitled under another law of this state or of the United States; or   Deprive a director or officer of the applicability, effect, or protection of the business judgment rule.      (Code 1933, § 41A-2211, enacted by Ga. L. 1974, p. 705, § 1; Ga. L. 1977, p. 730, § 7; Ga. L. 1982, p. 3, § 7; Ga. L. 2017, p. 693, § 1/HB 192; Ga. L. 2019, p. 1056, § 7/SB 52.)    The 2019 amendment,  effective May 12, 2019, part of an Act to revise, modernize, and correct the Code, revised punctuation in the introductory language of subsection (b).   Editor's notes.   - Ga. L. 2017, p. 693, § 4/HB 192, not codified by the General Assembly, provides that: "This Act shall apply only to causes of action arising on or after July 1, 2017."   Law reviews.   - For article, "2013 Georgia Corporation and Business Organization Case Law Developments," see 19 Ga. St. B.J. 28 (April 2014). For annual survey on business associations, see 66 Mercer L. Rev. 15 (2014). For annual survey of business associations, see 67 Mercer L. Rev. 15 (2015). For article, "2014 Georgia Corporation and Business Organization Case Law Developments," see 20 Ga. St. Bar. J. 26 (April 2015). For article on the 2017 amendment of this Code section, see 34 Ga. St. U.L. Rev. 1 (2017). For annual survey on trial practice and procedure, see 69 Mercer L. Rev. 321 (2017).   JUDICIAL DECISIONS   Judicial notice.   - After the FDIC brought claims against a bank's former directors and officers for negligence, breach of fiduciary duty, and gross negligence, a court declined to take judicial notice of facts in the FDIC's Officer of Inspector General's Audit Report of the Bank and its Congressional testimony that the defendants alleged rebutted allegations that the defendants were negligent or grossly negligent because at the motion to dismiss stage, it was not for the court to weigh those facts against allegations of the complaint and determine, as a matter of law, whether the defendants breached the standard of care required under Georgia law. FDIC v. Adams, F. Supp. 2d (N.D. Ga. Apr. 10, 2013).   Business judgment rule applies.   - FDIC's claims against former officers and directors of a bank for ordinary negligence and breach of fiduciary duty were subject to the business judgment rule. The FDIC rebutted the business judgment presumption, and the FDIC's claims could go forward, as the allegations of the complaint, taken together, painted a picture of the officers and directors failing to implement any safeguards and ignoring the ones actually put in place so that they could pursue a rapid growth strategy and accumulate large profits in a short period of time. FDIC v. Adams, F. Supp. 2d (N.D. Ga. Apr. 10, 2013).   RESEARCH REFERENCES   C.J.S.   - 9 C.J.S., Banks and Banking, §§ 106, 107, 111.   ALR.    - Powers of bank president or vice-president, 1 A.L.R. 693; 67 A.L.R. 970.    Implied, apparent or ostensible, and presumed authority of bank cashier to surrender or waive some right of bank, 108 A.L.R. 713.   Liability, under National Banking Act (12 USCS § 93), of national bank directors for retaliation against officer or employee who discloses or refuses to commit banking irregularity, 101 A.L.R. Fed. 377.