Arizona Laws 10-830. General standards of conduct for directors
A. A director’s duties, including duties as a member of a committee, shall be discharged:
Terms Used In Arizona Laws 10-830
- Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
- Articles of incorporation: means the original or restated articles of incorporation or articles of merger and all amendments to the articles of incorporation or merger and includes amended and restated articles of incorporation and articles of amendment and merger. See Arizona Laws 10-140
- Board of directors: means the group of persons vested with the management of the affairs of the corporation irrespective of the name by which the group is designated and includes the governing body or bodies of a water users' association if the articles of incorporation of the water users' association provide for a governing body or bodies denominated other than as a board of directors. See Arizona Laws 10-140
- Bylaws: means the code of rules adopted for the regulation or management of the affairs of the corporation irrespective of the name by which those rules are designated. See Arizona Laws 10-140
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Member: means , without regard to what a person is called in the articles of incorporation or bylaws, any person or persons who, pursuant to a provision of a corporation's articles of incorporation or bylaws, have the right to vote for the election of a director or directors. See Arizona Laws 10-3140
- Person: includes an individual and entity. See Arizona Laws 10-140
1. In good faith.
2. With the care an ordinarily prudent person in a like position would exercise under similar circumstances.
3. In a manner the director reasonably believes to be in the best interests of the corporation.
B. In discharging duties, a director is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, if prepared or presented by any of the following:
1. One or more officers or employees of the corporation whom the director reasonably believes are reliable and competent in the matters presented.
2. Legal counsel, public accountants or other persons as to matters the director reasonably believes are within the person’s professional or expert competence.
3. A committee of the board of directors of which the director is not a member if the director reasonably believes the committee merits confidence.
C. A director is not acting in good faith if the director has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection B of this section unwarranted.
D. Unless otherwise provided in the articles of incorporation or bylaws or a resolution of the board of directors of the corporation, in determining what is in the best interests of the corporation, a director:
1. Must consider the effect of a proposed action or inaction on the shareholders and whether a proposed action or inaction may further the purposes of the corporation.
2. May consider the effects of any action or inaction on the long-term and short-term interests of the corporation, its shareholders, employees, customers, community and environment and any other group and other pertinent factors that the director deems appropriate.
E. The best interests of the corporation do not require that any particular interests be given priority over other interests unless the articles of incorporation, the bylaws, a resolution of the board of directors or a resolution approved by the number of shareholders required to amend the articles of incorporation states an intention to give priority to particular interests.