Louisiana Revised Statutes 12:1821 – Standard of conduct for directors
Terms Used In Louisiana Revised Statutes 12:1821
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- 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.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- General public benefit: means a material positive impact on society and the environment, taken as a whole, assessed against a third-party standard, from the business and operations of a benefit corporation. See Louisiana Revised Statutes 12:1803
- person: includes a body of persons, whether incorporated or not. See Louisiana Revised Statutes 1:10
- Specific public benefit: means any of the following:
(a) Serving low-income or underserved individuals or communities. See Louisiana Revised Statutes 12:1803
A. In discharging the duties of their respective positions and in considering the best interests of the benefit corporation, the board of directors, committees of the board, and individual directors of a benefit corporation:
(1) Shall consider the effects of any action or inaction upon all of the following:
(a) The shareholders of the benefit corporation.
(b) The employees and work force of the benefit corporation, its subsidiaries, and its suppliers.
(c) The interests of customers as beneficiaries of the general public benefit or specific public benefit purposes of the benefit corporation.
(d) Community and societal factors, including those of each community in which offices or facilities of the benefit corporation, its subsidiaries, or its suppliers are located.
(e) The local and global environment.
(f) The short-term and long-term interests of the benefit corporation, including benefits that may accrue to the benefit corporation from its long-term plans and the possibility that these interests may be best served by the continued independence of the benefit corporation.
(g) The ability of the benefit corporation to accomplish its general public benefit purpose and any specific public benefit purpose.
(2) May consider other pertinent factors or the interests of any other group that they deem appropriate.
(3) Shall not be required to give priority to the interests of a particular person or group referred to in Paragraph (1) or (2) of this Subsection over the interests of any other person or group unless the benefit corporation has stated in its articles the intention to give priority to certain interests related to the accomplishment of its general public benefit purpose or of a specific public benefit purpose identified in the articles.
B. The consideration of interests and factors in the manner required by Subsection A of this Section shall not constitute a violation of La. Rev. Stat. 12:91.
C. A director shall not be personally liable for monetary damages for any of the following:
(1) Any act or omission covered by a provision in the articles of incorporation that eliminates or limits the liability of the director as authorized in La. Rev. Stat. 12:24(C)(4).
(2) Any act or omission as a director if the director performed the duties of office pursuant to La. Rev. Stat. 12:91.
(3) Failure of the benefit corporation to pursue or create a general public benefit or specific public benefit.
D. A director shall not have a duty to a person that is a beneficiary of the general public benefit purpose or a specific public benefit purpose of a benefit corporation arising from the status of the person as a beneficiary.
Acts 2012, No. 442, §1.