§ 3-1-13.3. General standards of conduct for directors and officers.

(1) A director shall perform his duties as a director, and as a member of a committee, and each officer with discretionary authority shall perform his duties under that authority:

(a) in good faith;

(b) with the care an ordinarily prudent person in a similar position would exercise under similar circumstances; and

(c) in a manner the director or officer reasonably believes to be in the best interests of the association.

(2) In performing his duties, a director or officer may rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:

(a) one or more officers or employees of the association whom the director or officer reasonably believes to be reliable and competent in the matters presented;

(b) legal counsel, public accountants, or other persons as to matters the director or officer reasonably believes are within the person's professional or expert competence; or

(c) in the case of a director, a committee of the board of directors of which he is not a member, if the director reasonably believes the committee merits confidence.

(3) A director or officer is not acting in good faith if he has knowledge that makes reliance otherwise permitted by Subsection (2) unwarranted.

(4) A director or officer is not liable to the association, its members, or any conservator or receiver, or any assignee or successor-in-interest thereof, for any action taken, or any failure to take any action, as an officer or director unless:

(a) the director or officer has breached or failed to perform the duties of the office in compliance with this section; and

(b) the breach or failure to perform constitutes gross negligence, willful misconduct, or intentional infliction of harm on the association or the members.

Enacted by Chapter 204, 1994 General Session