2023 Utah Code › Title 16 - Corporations › Chapter 10a - Utah Revised Business Corporation Act › Part 8 - Directors and Officers › Section 840 - General standards of conduct for directors and officers.

Effective 5/9/2017
16-10a-840.
General standards of conduct for directors and officers.
(1) Each director shall discharge the director's duties as a director, including duties as a member of a committee, and each officer with discretionary authority shall discharge the officer's duties under that authority:
(a) in good faith;
(b) with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and
(c) in a manner the director or officer reasonably believes to be in the best interests of the corporation.
(2) In discharging the director's or officer's duties, a director or officer is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:
(a) one or more officers or employees of the corporation, or of any other corporation of which at least 50% of the outstanding shares of stock entitling the holder of the shares to vote in the election of directors is owned directly or indirectly by the corporation, whom the director or officer reasonably believes to be reliable and competent in the matters presented;
(b) legal counsel, public accountants, or other persons as to matters the director or officer reasonably believes are within the person's professional or expert competence; or
(c) in the case of a director, a committee of the board of directors of which the director is not a member:
(i) if the committee is designated in accordance with the articles of incorporation or the bylaws;
(ii) if the information, opinion, report, or statement is within the committee's designated authority;
(iii) if the director reasonably believes the committee merits confidence; and
(iv) subject to Subsection (3), so long as in so relying the director is acting in good faith with the degree of care contemplated by Subsection (1)(b).
(3) A director or officer is not acting in good faith if the director or officer has knowledge concerning the matter in question that makes reliance otherwise permitted by Subsection (2) unwarranted.
(4) A director or officer is not liable to the corporation, its shareholders, or any conservator or receiver, or any assignee or successor-in-interest thereof, for any action taken, or any failure to take any action, as an officer or director, as the case may be, unless:
(a) the director or officer has breached or failed to perform the duties of the office in compliance with this section; and
(b) the breach or failure to perform constitutes gross negligence, willful misconduct, or intentional infliction of harm on the corporation or the shareholders.
(5)
(a) For purposes of this Subsection (5) and notwithstanding Section 16-10a-102, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the corporation whether through the ownership of voting stock, by contract, or otherwise.
(b) In taking action, including action that may involve or relate to a change or potential change in the control of the corporation, the director is entitled to consider:
(i) both the long-term and the short-term interests of the corporation and the corporation's shareholders; and
(ii) the effects that the corporation's actions may have in the long-term or short-term on any of the following:
(A) the prospects for potential growth, development, productivity, and profitability of the corporation;
(B) the corporation's current employees;
(C) the corporation's retired employees and other beneficiaries receiving or entitled to receive retirement, welfare, or similar benefits from or pursuant to any plan sponsored, or agreement entered into, by the corporation;
(D) the corporation's customers and creditors; and
(E) the ability of the corporation to provide, as a going concern, goods, services, employment opportunities, employment benefits, and otherwise contribute to the communities in which the corporation does business.
(c) This Subsection (5) does not create any duty owed by a director to any person to consider or afford any particular weight to any factor listed in Subsection (5)(b) or abrogate any duty of the director, either statutory or recognized by common law or court decisions.
Amended by Chapter 439, 2017 General Session