Arizona Laws 10-3830. General standards for directors
A. A director’s duties, including duties as a member of a committee, shall be discharged:
Terms Used In Arizona Laws 10-3830
- Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
- 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
- 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.
- Donor: The person who makes a gift.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Member: means , without regard to what a person is called in the articles of incorporation or bylaws, any person or persons who, pursuant to a provision of a corporation's articles of incorporation or bylaws, have the right to vote for the election of a director or directors. See Arizona Laws 10-3140
- Person: includes an individual and entity. See Arizona Laws 10-140
- Proceeding: includes a civil suit and a criminal, administrative and investigatory action. See Arizona Laws 10-140
- Property: includes both real and personal property. See Arizona Laws 1-215
- Trustee: A person or institution holding and administering property in trust.
1. In good faith.
2. With the care an ordinarily prudent person in a like position would exercise under similar circumstances.
3. In a manner the director reasonably believes to be in the best interests of the corporation.
B. In discharging duties, a director is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, if prepared or presented by any of the following:
1. One or more officers or employees of the corporation whom the director reasonably believes are reliable and competent in the matters presented.
2. Legal counsel, public accountants or other person as to matters the director reasonably believes are within the person’s professional or expert competence.
3. A committee of or appointed by the board of directors of which the director is not a member if the director reasonably believes the committee merits confidence.
4. In the case of corporations organized for religious purposes, religious authorities and ministers, priests, rabbis or other persons whose position or duties in the religious organization the director believes justify reliance and confidence and whom the director believes to be reliable and competent in the matters presented.
C. A director is not acting in good faith if the director has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection B unwarranted.
D. A director is not liable for any action taken as a director or any failure to take any action if the director’s duties were performed in compliance with this section. In any proceeding commenced under this section or any other provision of this chapter, a director has all of the defenses and presumptions ordinarily available to a director. A director is presumed in all cases to have acted, failed to act or otherwise discharged such director’s duties in accordance with subsection A. The burden is on the party challenging a director’s action, failure to act or other discharge of duties to establish by clear and convincing evidence facts rebutting the presumption.
E. A director shall not be deemed to be a trustee with respect to the corporation or with respect to any property held or administered by the corporation, including property that may be subject to restrictions imposed by the donor or transferor of that property.