1.

 Standard and liability.

 A director shall discharge the duties of the position of director in good faith, in a manner the director reasonably believes to be in the best interests of the cooperative, and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. A person who so performs those duties is not liable by reason of being or having been a director of the cooperative.

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Terms Used In Iowa Code 501A.712

  • Board: means the board of directors of a cooperative. See Iowa Code 501A.102
  • Cooperative: means a business association organized under this chapter. See Iowa Code 501A.102
  • 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
  • Patron: means a person or entity who conducts patronage with the cooperative, regardless of whether the person is a member. See Iowa Code 501A.102
  • person: means individual, corporation, limited liability company, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, or any other legal entity. See Iowa Code 4.1
  • state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
 2.

 Reliance.
 a. A director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, in each case prepared or presented by any of the following:

 (1) One or more officers or employees of the cooperative whom the director reasonably believes to be liable and competent in the matters presented.
 (2) Counsel, public accountants, or other persons as to matters that the director reasonably believes are within the person’s professional or expert competence.
 (3) A committee of the board upon which the director does not serve, duly established by the board, as to matters within its designated authority, if the director reasonably believes the committee to merit confidence.
 b. Paragraph “a” does not apply to a director who has knowledge concerning the matter in question that makes the reliance otherwise permitted by paragraph “a” unwarranted.
 3.

 Presumption of assent and dissent.

 A director who is present at a meeting of the board when an action is approved by the affirmative vote of a majority of the directors present is presumed to have assented to the action approved, unless any of the following applies:

 a. The director objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and does not participate in the meeting after the objection, in which case the director is not considered to be present at the meeting for any purpose of this chapter.
 b. The director votes against the action at the meeting.
 c. The director is prohibited by a conflict of interest from voting on the action.
 4.

 Considerations.

 In discharging the duties of the position of director, a director may, in considering the best interests of the cooperative, consider the interests of the cooperative’s employees, customers, suppliers, and creditors, the economy of the state, and long-term as well as short-term interests of the cooperative and its patron members, including the possibility that these interests may be best served by the continued independence of the cooperative.

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