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2018 Georgia Code 14-3-842 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 14-3-842 Case Law from Google Scholar Amendments to OCGA 14-3-842

TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

Section 3. Nonprofit Corporations, 14-3-101 through 14-3-1703.

ARTICLE 8 DIRECTORS AND OFFICERS

14-3-842. Standards of conduct for officers.

Unless a different standard is prescribed by law:

  1. An officer with discretionary authority shall discharge his or her duties under that authority:
    1. In a manner he or she believes in good faith to be in the best interests of the corporation; and
    2. With the care an ordinarily prudent person in a like position would exercise under similar circumstances;
  2. In discharging his or her duties an officer is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:
    1. One or more officers or employees of the corporation whom the officer reasonably believes to be reliable and competent in the matters presented; or
    2. Legal counsel, public accountants, or other persons as to matters the officer reasonably believes are within the person's professional or expert competence;
  3. In the instances described in paragraph (2) of this Code section, an officer is not entitled to rely if he or she has knowledge concerning the matter in question that makes reliance otherwise permitted by paragraph (2) of this Code section unwarranted; and
  4. An officer is not liable to the corporation, any member, or other person for any action taken or not taken as an officer, if the officer performed the duties of his or her office in compliance with this Code section.

(Code 1981, §14-3-842, enacted by Ga. L. 1991, p. 465, § 1; Ga. L. 2004, p. 508, §§ 66, 68.)

Law reviews.

- For article, "The Development of Nonprofit Corporation Law and an Agenda for Reform," see 34 Emory L.J. 617 (1985). For article, "What Duty of Care Does a Homeowner Association Owe Its Members?," see 22 Ga. St. Bar J. 19 (Dec. 2016).

COMMENT

This section is based on its Business Code counterpart. Like section 14-3-830, this section contains an introductory proviso that is in neither the Model Act nor the Business Code. The proviso is intended to acknowledge the existence of other laws that may establish different standards for certain activities engaged in by officers, such as investment of corporate funds.

RESEARCH REFERENCES

Am. Jur. 2d.

- 18B Am. Jur. 2d, Corporations, §§ 1426 et seq.

C.J.S.

- 10 C.J.S., Beneficial Associations, § 34. 14 C.J.S., Charities, § 92 et seq. 19 C.J.S., Corporations, §§ 558, 562 et seq., 575, 576. 77 C.J.S., Religious Societies, § 44 et seq.

ALR.

- Validity of individual contract by director to put or maintain a designated person in office, 12 A.L.R. 1070; 45 A.L.R. 795.

Power of directors to sell property of corporation without consent of stockholders, 60 A.L.R. 1210.

Right of stockholder, director, officer, or agent, of a corporation to engage in a similar or competing business, 64 A.L.R. 782.

Authority of corporate officer to employ agent or broker to sell property, 159 A.L.R. 796.

What business opportunities are in "line of business" of corporation for purposes of determining whether a corporate opportunity was presented, 77 A.L.R.3d 961.

Duty of corporate directors to exercise "informed" judgment in recommending responses to merger or tender offers, 46 A.L.R.4th 887.

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