(a) The board of directors of a public benefit corporation shall manage or direct the business and affairs of the corporation in a manner that balances:
(1) the pecuniary interests of the shareholders;
(2) the best interests of those persons materially affected by the corporation’s conduct; and
(3) the specific public benefit or benefits specified in the corporation’s certificate of formation.
(b) A director of a public benefit corporation does not, by virtue of the public benefit provisions included in the certificate of formation or by virtue of the purpose and requirements of Sections 21.953(a) and (b), owe any duty to any person because of:
(1) any interest the person has in the public benefit or benefits specified in the certificate of formation; or
(2) any interest materially affected by the corporation’s conduct.

Terms Used In Texas Business Organizations Code 21.956

  • Business: means a trade, occupation, profession, or other commercial activity. See Texas Business Organizations Code 1.002
  • Certificate of formation: means :
    (A) the document required to be filed with the filing officer under Chapter 3 to form a filing entity; and
    (B) if appropriate, a restated certificate of formation and all amendments of an original or restated certificate of formation. See Texas Business Organizations Code 1.002
  • 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 an entity governed as a corporation under Title 2 or 7. See Texas Business Organizations Code 1.002
  • Director: means an individual who serves on the board of directors of a foreign or domestic corporation. See Texas Business Organizations Code 1.002
  • Person: means an individual or a corporation, partnership, limited liability company, business trust, trust, association, or other organization, estate, government or governmental subdivision or agency, or other legal entity, or a protected series or registered series of a domestic limited liability company or foreign entity. See Texas Business Organizations Code 1.002

(c) With respect to a decision implicating the balance requirement of Subsection (a), a director of a public benefit corporation is considered to have satisfied the director’s duties to shareholders and the corporation if the director’s decision is both informed and disinterested and is not a decision that no person of ordinary, sound judgment would approve.
(d) The certificate of formation of a public benefit corporation may include a provision that any disinterested failure of a director to satisfy the requirements of this section does not, for the purposes of the applicable provisions of this code, constitute an act or omission not in good faith or a breach of the duty of loyalty.

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