2023 Vermont Statutes › Title 11A - Vermont Business Corporations › Chapter 21 - Benefit Corporations › § 21.10. Benefit director

§ 21.10. Benefit director
(a) Except as provided in subsection (e) of this section, the board of directors of a benefit corporation shall include at least one director who shall be designated a “benefit director” and shall have, in addition to all of the powers, duties, rights, and immunities of the other directors of the benefit corporation, the powers, duties, rights, and immunities provided in this section.
(b) A benefit director shall be elected and may be removed in the manner provided by subchapter 1 of chapter 8 of this title and shall be an individual who is independent of the benefit corporation. A benefit director may serve as the benefit officer at the same time as serving as a benefit director. The articles of incorporation or bylaws of a benefit corporation may prescribe additional qualifications of a benefit director not inconsistent with this subsection.
(c)(1) A benefit director shall be responsible for the preparation of the annual benefit report required under section 21.14 of this title.
(2) A benefit director may retain an independent third party to audit the annual benefit report or conduct any other assessment of the benefit corporation’s social and environmental performance.
(3) A benefit director shall prepare and shall include in the annual benefit report a statement whether, in the opinion of the benefit director:
(A) the benefit corporation acted in accordance with its general public benefit purpose and any specific public benefit purpose in all material respects during the period covered by the report; and
(B) the directors and officers acted in accordance with the requirements of subsection 21.09(a) and section 21.11 of this title, respectively.
(4) If in the opinion of the benefit director the benefit corporation failed to act in accordance with its general and any specific public benefit purposes or if its directors or officers failed to act in accordance with the requirements of subsection 21.09(a) and section 21.11 of this title, respectively, then the statement of the benefit director shall include a description of the ways in which the benefit corporation or its directors or officers failed to so act.
(d) The acts and omissions of an individual in the capacity of a benefit director shall constitute for all purposes acts and omissions of that individual in the capacity of a director of the benefit corporation.
(e) If the articles of incorporation of a benefit corporation that is a close corporation dispense with or restrict the discretion or powers of the board of directors pursuant to sections 20.08 and 20.09 of this title, then the articles of incorporation or the shareholder agreement shall specify the persons who shall exercise the powers, duties, and rights of the board of directors and the benefit director, as provided in this chapter. A person who exercises one or more of the powers, duties, or rights of a benefit director pursuant to this subsection:
(1) except in the case of a corporation with annual gross revenue of $5 million or more in each of the two years preceding his or her appointment, is not required to be independent of the benefit corporation;
(2) shall have the immunities of a benefit director;
(3) may share the powers, duties, and rights of a benefit director with one or more other persons; and
(4) shall not be subject to the procedures for election or removal of directors provided in subchapter 1 of chapter 8 of this title unless the person is also a director of the benefit corporation or the articles of incorporation or shareholder agreement makes those procedures applicable.
(f) Regardless of whether the articles of incorporation of a benefit corporation include a provision eliminating or limiting the personal liability of directors authorized by subdivision 2.02(b)(4) of this title, a benefit director shall not be personally liable for any act or omission taken in his or her official capacity as a benefit director unless the act or omission is not in good faith, involves intentional misconduct or a knowing violation of law, or involves a transaction from which the director directly or indirectly derived an improper personal benefit. (Added 2009, No. 113 (Adj. Sess.), § 1, eff. July 1, 2011; amended 2011, No. 146 (Adj. Sess.), § 1.)