Kentucky Revised Statutes

Ky. Rev. Stat. § 271B.8-300 (2026)

General standards for directors -- Directors of a public benefit

✓ current as of May 2026

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corporation.

(1) A director shall discharge his duties as a director, including his duties as a member of a committee:

(a) In good faith;

(b) On an informed basis; and

(2) A director shall be considered to discharge his duties on an informed basis if he makes, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, inquiry into the business and affairs of the corporation, or into a particular action to be taken or decision to be made.

(3) In discharging his duties a director shall be entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:

(a) One (1) or more officers or employees of the corporation whom the director honestly believes to be reliable and competent in the matters presented;

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

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

(4) A director shall not be considered to be acting in good faith if he has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (3) of this section unwarranted.

(5) In addition to any other limitation on a director's liability for monetary damages contained in any provision of the corporation's articles of incorporation adopted in accordance with subsection (2)(d) of KRS 271B.2-020, any action taken as a director, or any failure to take any action as a director, shall not be the basis for monetary damages or injunctive relief unless:

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

(b) In the case of an action for monetary damages, the breach or failure to perform constitutes willful misconduct or wanton or reckless disregard for the best interests of the corporation and its shareholders.

(6) A person bringing an action for monetary damages under this section shall have the burden of proving by clear and convincing evidence the provisions of subsection (5)(a) and (b) of this section, and the burden of proving that the breach or failure to perform was the legal cause of damages suffered by the corporation.

(7) Nothing in this section shall eliminate or limit the liability of any director for any act or omission occurring prior to July 15, 1988.

(8) In a public benefit corporation:

(a) The board of directors shall manage or direct the business and affairs of the public benefit corporation in a manner that balances the pecuniary interests of the stockholders, the best interests of those materially affected by the corporation's conduct, and the specific public benefit or public benefits identified in its articles of incorporation;

(b) A director of the public benefit corporation shall not, by virtue of the public benefit provisions set forth in the corporation's articles of incorporation, have any duty to any person on account of any interest of the person in the public benefit or public benefits identified in the articles of incorporation or on account of any interest materially affected by the corporation's conduct;

(c) With respect to a decision implicating the balance requirement in paragraph (a) of this subsection, a director shall act in conformity with subsection (1) of this section; and

(d) The articles of incorporation of a public benefit corporation may include a provision that any disinterested failure to satisfy this subsection shall not constitute an act or omission not in good faith or a breach of the duty of loyalty. Effective:June 29, 2017 History: Amended 2017 Ky. Acts ch. 28, sec. 7, effective June 29, 2017. -- Created 1988 Ky. Acts ch. 23, sec. 85, effective January 1, 1989; and ch. 224, sec. 8, effective July 15, 1988. Formerly codified as KRS 271A.202.

Notes of Decisions

Cited in 16 cases (3 in the last 5 years), 2000–2025 · leading case: Baptist Physicians Lexington, Inc. v. New Lexington Clinic, P.S.C., 436 S.W.3d 189 (Ky. 2013).

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Baptist Physicians Lexington, Inc. v. New Lexington Clinic, P.S.C., 436 S.W.3d 189 (Ky. 2013). · cites it 21× “” Preparing for and participating in a competing venture does not constitute the type of internal corporate governance conduct addressed in KRS 271B.8-300 and consequently the statute does not apply.”

Peoples Bank of N. Kentucky, Inc. v. CROWE CHIZEK & CO., 277 S.W.3d 255 (Ky. Ct. App. 2008). · cites it 6× “3-065; (3) professional negligence; (4) breach of fiduciary duty; and (5) violation of KRS 271B.8-300. PBNK sought both compensatory and punitive damages for these claims.”

Flegles, Inc. v. Truserv Corp., 289 S.W.3d 544 (Ky. 2009). · cites it 2× “TruServ's directors and officers may well have owed fiduciary duties to the corporation and to its shareholders, TruServ Corporation v.”

Sergent v. McKinstry ex rel. BD Unsecured Creditors Trust, 472 B.R. 387 (E.D. Ky. 2012). · cites it 4× “Ky.Rev.Stat. § 271B.8-300(5)(b); see also New Lexington Clinic, P.”

Sahni v. Hock, 369 S.W.3d 39 (Ky. Ct. App. 2010). · cites it 7× “Hock counters that such direct claims are permitted by KRS 271B.8-300. The general rule is that “[a] shareholder’s rights are merely derivative unless he can show violation of a duty owed directly to him.”

Griffin v. Jones, 170 F. Supp. 3d 956 (W.D. Ky. 2016). · cites it 2× “In 2008, Bain sold his 50% stake in ICS to Griffin for $2 million. (DN 18). Griffin is a stockholder in ICS but has never been an officer or director of ICS.”

2815 Grand Realty Corp. v. Goose Creek Energy, Inc., 656 F. Supp. 2d 707 (E.D. Ky. 2009). · cites it 5× “Finally, the Plaintiffs assert that the Defendants who are officers or directors of Goose Creek and GC Holdings have violated KRS 271B.8-300 and KRS 271B.8-420, Kentucky state statutes setting out the standards for corporate officers and directors.”

Gross v. Adcomm, Inc., 478 S.W.3d 396 (Ky. Ct. App. 2015). · cites it 2× “The statutory scheme provides that a corporation has the ability to pursue claims in its own name against directors and officers on behalf of a shareholder under KRS 271B.8-300 (concerning conduct of corporate directors); KRS 271B.”

Scherer v. Quality Commc'ns, Inc. (In Re Quality Commc'ns, Inc.), 347 B.R. 227 (Bankr. W.D. Ky. 2006). · cites it 2× “See KRS § 271B.8-300. The Trustee contends that Strozdas breached his fiduciary duties by negotiating the settlement that resulted in the release of his personal guarantee while giving up QCI’s lone asset, the BOSC receivable.”

Brewer v. Lincoln Int'l Corp., 148 F. Supp. 2d 792 (W.D. Ky. 2000). · cites it 12× “The plaintiffs further allege that Sis-ney, Dolin, and Barhorst, as directors, violated the duty of care owed to shareholders in violation of KRS § 271B.8-300. In addition to their federal securities law claims, the plaintiffs allege that the defendants’ conduct violated KRS §…”

Peoples Bank of N. Kentucky, Inc. v. Crowe Horwath, 390 S.W.3d 830 (Ky. Ct. App. 2012). · cites it 4× “3-065; (3) professional negligence; (4) breach of fiduciary duty; and (5) violation of KRS 271B.8-300. PBNK sought both compensatory and punitive damages.”

Wilson v. Farm Credit Mid-Am., ACA (W.D. Ky. 2025). · cites it 2× “But Wilson recognizes that whether FCMA and the Director Defendants owed a duty depends upon Kentucky law, specifically, KRS § 271B.8-300 and KRS § 271B.8- 420, which set forth the standards for directors.”

Show all 16 citing cases →

— Ky. Rev. Stat. § 271B.8-300(1) — 3 cases

Baptist Physicians Lexington, Inc. v. New Lexington Clinic, P.S.C., 436 S.W.3d 189 (Ky. 2013). “” Preparing for and participating in a competing venture does not constitute the type of internal corporate governance conduct addressed in KRS 271B.8-300 and consequently the statute does not apply.”

Brewer v. Lincoln Int'l Corp., 148 F. Supp. 2d 792 (W.D. Ky. 2000). “The plaintiffs further allege that Sis-ney, Dolin, and Barhorst, as directors, violated the duty of care owed to shareholders in violation of KRS § 271B.8-300. In addition to their federal securities law claims, the plaintiffs allege that the defendants’ conduct violated KRS §…”

Fabing v. Howell (In Re Howell), 373 B.R. 1 (Bankr. W.D. Ky. 2007).

— Ky. Rev. Stat. § 271B.8-300(3) — 1 case

Peoples Bank of N. Kentucky, Inc. v. CROWE CHIZEK & CO., 277 S.W.3d 255 (Ky. Ct. App. 2008). “3-065; (3) professional negligence; (4) breach of fiduciary duty; and (5) violation of KRS 271B.8-300. PBNK sought both compensatory and punitive damages for these claims.”

— Ky. Rev. Stat. § 271B.8-300(5) — 1 case

— Ky. Rev. Stat. § 271B.8-300(5)(b) — 2 cases

Sergent v. McKinstry ex rel. BD Unsecured Creditors Trust, 472 B.R. 387 (E.D. Ky. 2012). “Ky.Rev.Stat. § 271B.8-300(5)(b); see also New Lexington Clinic, P.”

— Ky. Rev. Stat. § 271B.8-300(6) — 3 cases

Gross v. Adcomm, Inc., 478 S.W.3d 396 (Ky. Ct. App. 2015). “The statutory scheme provides that a corporation has the ability to pursue claims in its own name against directors and officers on behalf of a shareholder under KRS 271B.8-300 (concerning conduct of corporate directors); KRS 271B.”

HDR Farms Inc. Liquidating Trust v. Applied Botanics LLC f/k/a XSI USA, LLC (Bankr. E.D. Ky. 2022).

— Ky. Rev. Stat. § 271B.8-300(b) — 1 case

McRedmond v. Est. of Andrew Marianelli (Tenn. Ct. App. 2000).

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