Minnesota Statutes 308B.461 – Director Conflicts of Interest
Subdivision 1.Conflict and procedure when conflict arises.
(a) A contract or other transaction between a cooperative and one or more of its directors, or between a cooperative and a business entity in or of which one or more of its directors are governors, directors, managers, officers, or legal representatives or have a material financial interest, is not void or voidable because the director or directors or the other business entities are parties or because the director or directors are present at the meeting of the members or the board or a committee at which the contract or transaction is authorized, approved, or ratified, if:
Terms Used In Minnesota Statutes 308B.461
- children: includes children by birth or adoption;
(9) "day" comprises the time from midnight to the next midnight;
(10) "fiscal year" means the year by or for which accounts are reckoned;
(11) "hereafter" means a reference to the time after the time when the law containing such word takes effect;
(12) "heretofore" means a reference to the time previous to the time when the law containing such word takes effect;
(13) "judicial sale" means a sale conducted by an officer or person authorized for the purpose by some competent tribunal;
(14) "minor" means an individual under the age of 18 years;
(15) "money" means lawful money of the United States;
(16) "night time" means the time from sunset to sunrise;
(17) "non compos mentis" refers to an individual of unsound mind;
(18) "notary" means a notary public;
(19) "now" in any provision of a law referring to other laws in force, or to persons in office, or to any facts or circumstances as existing, relates to the laws in force, or to the persons in office, or to the facts or circumstances existing, respectively, on the effective date of such provision;
(20) "verified" when used in reference to writings, means supported by oath or affirmation. See Minnesota Statutes 645.45
- Contract: A legal written agreement that becomes binding when signed.
- Majority: means with respect to an individual the period of time after the individual reaches the age of 18. See Minnesota Statutes 645.451
- Person: may extend and be applied to bodies politic and corporate, and to partnerships and other unincorporated associations. See Minnesota Statutes 645.44
- Quorum: The number of legislators that must be present to do business.
(1) the contract or transaction was, and the person asserting the validity of the contract or transaction sustains the burden of establishing that the contract or transaction was, fair and reasonable as to the cooperative at the time it was authorized, approved, or ratified and:
(i) the material facts as to the contract or transaction and as to the director’s or directors’ interest are disclosed or known to the members; and
(ii) the material facts as to the contract or transaction and as to the director’s or directors’ interest are fully disclosed or known to the board or a committee, and the board or committee authorizes, approves, or ratifies the contract or transaction in good faith by a majority of the board or committee, but the interested director or directors are not counted in determining the presence of a quorum and must not vote; or
(2) the contract or transaction is a distribution, contract, or transaction that is made available to all members or patron members as part of the cooperative’s business.
(b) If a committee is elected or appointed to authorize, ratify, or approve a contract or transaction under this section, the members of the committee must not have a conflict of interest and be charged with representing the best interests of the cooperative.
Subd. 2.Material financial interest.
For purposes of this section:
(1) a resolution fixing the compensation of a director or fixing the compensation of another director as a director, officer, employee, or agent of the cooperative, is not void or voidable or considered to be a contract or other transaction between a cooperative and one or more of its directors for purposes of this section even though the director receiving the compensation fixed by the resolution is present and voting at the meeting of the board or a committee at which the resolution is authorized, approved, or ratified or even though other directors voting upon the resolution are also receiving compensation from the cooperative; and
(2) a director has a material financial interest in each organization in which the director or the spouse; parents; children and spouses of children; brothers and sisters and spouses of brothers and sisters; and the brothers and sisters of the spouse of the director or any combination of them have a material financial interest. For purposes of this section, a contract or other transaction between a cooperative and the spouse; parents; children and spouses of children; brothers and sisters and spouses of brothers and sisters; and the brothers and sisters of the spouse of a director or any combination of them, is considered to be a transaction between the cooperative and the director.