Iowa Code 490.830 – Standards of conduct for directors
Current as of: 2024 | Check for updates
|
Other versions
1. Each member of the board of directors, when discharging the duties of a director, shall act in conformity with all of the following:
a. In good faith.
b. In a manner the director reasonably believes to be in the best interests of the corporation.
Terms Used In Iowa Code 490.830
- 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
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Oversight: Committee review of the activities of a Federal agency or program.
- Person: means a person as defined in section 4. See Iowa Code 490.140
- Rule: includes "regulation". See Iowa Code 4.1
2. The members of the board of directors or a board committee, when becoming informed in connection with their decision-making function or devoting attention to their oversight function, shall discharge their duties with the care that a person in a like position would reasonably believe appropriate under similar circumstances.
3. In discharging board or board committee duties, a director shall disclose, or cause to be disclosed, to the other board or committee members information which the director knows is not already known by them but known by the director to be material to the discharge of their decision-making or oversight functions, except that disclosure is not required to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule.
4. In discharging board or board committee duties, a director who does not have knowledge that makes reliance unwarranted is entitled to rely on the performance by any of the persons specified in subsection 6, paragraph “a” or “c”, to whom the board may have delegated, formally or informally by course of conduct, the authority or duty to perform one or more of the board’s functions that are delegable under applicable law.
5. In discharging board or board committee duties, a director who does not have knowledge that makes reliance unwarranted is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by any of the persons specified in subsection 6.
6. A director is entitled to rely, in accordance with subsection 4 or 5, on any of the following:
a. One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the functions performed or the information, opinions, reports, or statements provided.
b. Legal counsel, public accountants, or other persons retained by the corporation as to matters involving skills or expertise the director reasonably believes are any of the following:
(1) Matters within the particular person’s professional or expert competence.
(2) Matters as to which the particular person merits confidence.
c. A board committee of which the director is not a member if the director reasonably believes the committee merits confidence.