South Dakota Codified Laws 47-1A-830.1. Director reliance on performance or information supplied by specified persons
In discharging board or 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 subdivision (1) or subdivision (3) 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.
In discharging board or 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 following persons specified in subdivisions (1) to (3), inclusive.
Terms Used In South Dakota Codified Laws 47-1A-830.1
- 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.
- Person: includes an individual and an entity. See South Dakota Codified Laws 47-1A-140
A director is entitled to rely, in accordance with this section, on:
(1) 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;
(2) Legal counsel, public accountants, or other persons retained by the corporation as to matters involving skills or expertise the director reasonably believes are matters within the particular person‘s professional or expert competence or as to which the particular person merits confidence; or
(3) A committee of the board of directors of which the director is not a member if the director reasonably believes the committee merits confidence.
Source: SL 2005, ch 239, § 158.