Iowa Code 490.1704 – Duties of directors
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1. Each member of the board of directors of a benefit corporation, when discharging the duties of a director, shall act according to all of the following:
a. In a responsible and sustainable manner.
b. In a manner that pursues the public benefit or benefits identified in any public benefit provision.
Terms Used In Iowa Code 490.1704
- Articles of incorporation: means the articles of incorporation described in section 490. See Iowa Code 490.140
- Benefit corporation: means a corporation that includes in its articles of incorporation a statement that the corporation is subject to this subchapter. See Iowa Code 490.1701
- 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.
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Interest: means either or both of the following rights under the organic law governing an unincorporated entity:a. See Iowa Code 490.140
- Person: means a person as defined in section 4. See Iowa Code 490.140
- Public benefit: means a positive effect, or reduction of negative effects, on one or more communities or categories of persons or entities, other than shareholders solely in their capacity as shareholders, or on the environment, including effects of an artistic, charitable, economic, educational, cultural, literary, medical, religious, social, ecological, or scientific nature. See Iowa Code 490.1701
- Public benefit provision: means a provision in the articles of incorporation which states that the corporation shall pursue one or more identified public benefits. See Iowa Code 490.1701
- Responsible and sustainable manner: means a manner that does all of the following:
(1) Pursues through the business of the corporation the creation of a positive effect on society and the environment, taken as a whole, that is material taking into consideration the corporation's size and the nature of its business. See Iowa Code 490.17012. In fulfilling the duties under subsection 1, a director shall consider, to the extent affected, in addition to the interests of shareholders generally, the separate interests of stakeholders known to be affected by the business of the corporation including all of the following:a. The employees and workforces of the corporation, its subsidiaries, and its suppliers.b. Customers.c. Communities or society, including those of each community in which offices or facilities of the corporation, its subsidiaries, or its suppliers are located.d. The local and global environment.3. A director of a benefit corporation shall not, by virtue of the duties imposed by subsections 1 and 2, owe any duty to a person other than the benefit corporation due to any interest of the person in the status of the corporation as a benefit corporation or in any public benefit provision.4. Unless otherwise provided in the articles of incorporation, the violation by a director of the duties imposed by subsections 1 and 2 shall not constitute an intentional infliction of harm on the corporation or the shareholders for the purposes of section 490.202, subsection 2, paragraphs “d” and “e”.