Arizona Laws 10-2431. Standard of conduct for directors
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:
Terms Used In Arizona Laws 10-2431
- Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
- Articles of incorporation: means the original or restated articles of incorporation or articles of merger and all amendments to the articles of incorporation or merger and includes amended and restated articles of incorporation and articles of amendment and merger. See Arizona Laws 10-140
- 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
- Benefit corporation: means a corporation that both:
(a) Has elected to become subject to this chapter. See Arizona Laws 10-2402
- Board of directors: means the group of persons vested with the management of the affairs of the corporation irrespective of the name by which the group is designated and includes the governing body or bodies of a water users' association if the articles of incorporation of the water users' association provide for a governing body or bodies denominated other than as a board of directors. See Arizona Laws 10-140
- Bylaws: means the code of rules adopted for the regulation or management of the affairs of the corporation irrespective of the name by which those rules are designated. See Arizona Laws 10-140
- 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 Arizona Laws 10-2402
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Individual: includes the estate of an incompetent or deceased individual. See Arizona Laws 10-140
- Person: includes an individual and entity. See Arizona Laws 10-140
- Specific public benefit: includes :
(a) Providing low-income or underserved individuals or communities with beneficial products or services. See Arizona Laws 10-2402
1. Shall consider the effects of any action or inaction on:
(a) The shareholders of the benefit corporation.
(b) The employees and workforce 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 the interests referred to in section 10-2702 and other pertinent factors or the interests of any other group that they deem appropriate except that they do not have to give priority to the interests of a particular person or group referred to in this subsection over the interests of any other person or group unless the benefit corporation has stated in its articles of incorporation its intention to give priority to certain interests related to its accomplishment of its general public benefit purpose or of a specific public benefit purpose identified in its articles.
B. The consideration of interests and factors in the manner required by subsection A of this section does not constitute a violation of section 10-830.
C. Except as otherwise provided in this section, the standards of conduct and presumptions prescribed in chapter 8 of this title apply to directors of benefit corporations.
D. Except as provided in the articles of incorporation or bylaws, a director is not personally liable for monetary damages for failure of the benefit corporation to pursue or create general public benefit or a specific public benefit.
E. A director does 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.