Iowa Code 504.843 – Standards of conduct for officers
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1. An officer, when performing in such capacity, shall act in conformity with all of the following:
a. In good faith.
b. With the care that a person in a like position would reasonably exercise under similar circumstances.
c. In a manner the officer reasonably believes to be in the best interests of the corporation and its members, if any.
Terms Used In Iowa Code 504.843
- 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.
- Corporation: means a public benefit, mutual benefit, or religious corporation. See Iowa Code 504.141
- 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
- Person: includes any individual or entity. See Iowa Code 504.141
2. In discharging the officer’s duties, an officer who does not have knowledge that makes reliance unwarranted is entitled to rely on any of the following:
a. The performance of properly delegated responsibilities by one or more employees of the corporation whom the officer reasonably believes to be reliable and competent in performing the responsibilities delegated.
b. Information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by one or more officers or employees of the corporation whom the officer reasonably believes to be reliable and competent in the matters presented.
c. Legal counsel, public accountants, or other persons retained by the corporation as to matters involving the skills or expertise the officer reasonably believes are within the person’s professional or expert competence, or as to which the particular person merits confidence.
d. In the case of religious corporations, religious authorities and ministers, priests, rabbis, or other persons whose position or duties in the religious organization the officer believes justify reliance and confidence and whom the officer believes to be reliable and competent in the matters presented.
3. An officer shall not be liable as an officer to the corporation or its members for any decision to take or not to take action, or any failure to take any action, if the duties of the officer are performed in compliance with this section. Whether an officer who does not comply with this section shall have liability will depend in such instance on applicable law, including those principles of sections 504.832 and 504.901 that have relevance.