Virginia Code 13.1-788: Standard of conduct for directors.
A. Subject to § 13.1-690, 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:
Terms Used In Virginia Code 13.1-788
- Articles of incorporation: means all documents constituting, at any particular time, the charter of a corporation. See Virginia Code 13.1-603
- Benefit corporation: means a corporation organized pursuant to the provisions of this chapter:
1. See Virginia Code 13.1-782
- 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, as measured by a third-party standard, from the business and operations of a benefit corporation. See Virginia Code 13.1-782
- Individual: means a natural person. See Virginia Code 13.1-603
- Person: includes an individual and an entity. See Virginia Code 13.1-603
- Proceeding: includes civil suit and criminal, administrative, and investigatory action. See Virginia Code 13.1-603
- Specific public benefit: means a benefit that serves one or more public welfare, religious, charitable, scientific, literary, or educational purposes, or other purpose or benefit beyond the strict interest of the shareholders of the benefit corporation, including:
1. See Virginia Code 13.1-782
1. Shall consider the effects of any corporate action upon:
a. The shareholders of the benefit corporation;
b. The employees and workforce of the benefit corporation, its subsidiaries, and suppliers;
c. The interests of customers as beneficiaries of the general or specific public benefit purposes of the benefit corporation;
d. Community and societal considerations, including those of each community in which offices or facilities of the benefit corporation, its subsidiaries, or 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 and the general and specific public benefit purposes of the benefit corporation may be best served by the continued independence of the benefit corporation; and
g. The ability of the benefit corporation to accomplish its general and any specific public benefit purpose;
2. May consider:
a. The resources; intent; and past, stated, and potential conduct of any person seeking to acquire control of the benefit corporation; and
b. Other pertinent factors or the interests of any other person that they deem appropriate; and
3. Need not give priority to the interests of a particular person referred to in subdivisions 1 and 2 over the interests of any other person unless the benefit corporation has stated its intention to give priority to interests related to a specific public benefit purpose identified in its articles.
B. The consideration of interests and factors in the manner required by subsection A shall not constitute a violation of § 13.1-690 or a director conflict of interests under § 13.1-691.
C. In any proceeding brought by or in the right of a benefit corporation or brought by or on behalf of the shareholders of a benefit corporation, a director is not personally liable for monetary damages for:
1. Any action taken as a director if the director performed the duties of office in compliance with § 13.1-690 and this section; or
2. Failure of the benefit corporation to create general public benefit or any specific public benefit specified in its articles of incorporation or bylaws or otherwise adopted by the board of directors.
2011, c. 698.