Nev. Rev. Stat. § 78.138

Directors and officers: Fiduciary duties; exercise of powers; presumptions and considerations; liability to corporation, stockholders and creditors

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NRS 78.138 Directors and officers: Fiduciary duties; exercise of powers; presumptions and considerations; liability to corporation, stockholders and creditors.

1. The fiduciary duties of directors and officers are to exercise their respective powers in good faith, on an informed basis and with a view to the interests of the corporation.

2. In exercising their respective powers, directors and officers may, and are entitled to, rely on information, opinions, reports, books of account or statements, including financial statements and other financial data, that are prepared or presented by:

(a) One or more directors, officers or employees of the corporation reasonably believed to be reliable and competent in the matters prepared or presented;

(b) Counsel, public accountants, financial advisers, valuation advisers, investment bankers or other persons as to matters reasonably believed to be within the preparer’s or presenter’s professional or expert competence; or

(c) A committee on which the director or officer relying thereon does not serve, established in accordance with NRS 78.125, as to matters within the committee’s designated authority and matters on which the committee is reasonably believed to merit confidence,

Ê but a director or officer is not entitled to rely on such information, opinions, reports, books of account or statements if the director or officer has knowledge concerning the matter in question that would cause reliance thereon to be unwarranted.

3. Except as otherwise provided in subsection 1 of NRS 78.139, directors and officers, in deciding upon matters of business, are presumed to act in good faith, on an informed basis and with a view to the interests of the corporation. A director or officer is not individually liable for damages as a result of an act or failure to act in his or her capacity as a director or officer except as described in subsection 7.

4. Directors and officers, in exercising their respective powers with a view to the interests of the corporation, may:

(a) Consider all relevant facts, circumstances, contingencies or constituencies, which may include, without limitation, one or more of the following:

(1) The interests of the corporation’s employees, suppliers, creditors or customers;

(2) The economy of the State or Nation;

(3) The interests of the community or of society;

(4) The long-term or short-term interests of the corporation, including the possibility that these interests may be best served by the continued independence of the corporation; or

(5) The long-term or short-term interests of the corporation’s stockholders, including the possibility that these interests may be best served by the continued independence of the corporation.

(b) Consider or assign weight to the interests of any particular person or group, or to any other relevant facts, circumstances, contingencies or constituencies.

5. Directors and officers are not required to consider, as a dominant factor, the effect of a proposed corporate action upon any particular group or constituency having an interest in the corporation.

6. The provisions of subsections 4 and 5 do not create or authorize any causes of action against the corporation or its directors or officers.

7. Except as otherwise provided in NRS 35.230, 90.660, 91.250, 452.200, 452.270, 668.045 and 694A.030, or unless the articles of incorporation or an amendment thereto, in each case filed on or after October 1, 2003, provide for greater individual liability, a director or officer is not individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer unless:

(a) The presumption established by subsection 3 has been rebutted; and

(b) It is proven that:

(1) The director’s or officer’s act or failure to act constituted a breach of his or her fiduciary duties as a director or officer; and

(2) Such breach involved intentional misconduct, fraud or a knowing violation of law.

8. This section applies to all cases, circumstances and matters, including, without limitation, any change or potential change in control of the corporation unless otherwise provided in the articles of incorporation or an amendment thereto.

(Added to NRS by 1991, 1184; A 1993, 951; 1999, 1580; 2001, 3171; 2003, 3084; 2017, 3998; 2019, 90; 2021, 1501; 2025, 795)

Notes of Decisions

Cited in 45 cases (16 in the last 5 years), 1994–2025 · leading case: GUZMAN VS. JOHNSON

Sort: Relevance Newest Treatment

GUZMAN VS. JOHNSON (2021) nev · cites it 52× “The individual directors and AMC moved to dismiss under NRCP 12(b)(5), arguing that Guzman failed to rebut the business judgment rule under NRS 78.138. Guzman countered that she sufficiently pleaded facts to rebut the business judgment rule by arguing the fiduciaries here were…”

Shoen v. SAC Holding Corp. (2006) nev · cites it 5× “” 10 In 1991, the Nevada Legislature codified the business judgment rule at NRS 78.138. 11 In managing the corporation’s affairs, the board of directors may generally decide whether to take legal action on the corporation’s behalf.”

Pikk v. Pedersen (2016) ca10 · cites it 4× “Nev. Rev. Stat. § 78.138 (7). Most important here, the Director Defendants are not liable unless their actions constituted “intentional misconduct, fraud or a knowing violation of law.”

Louisiana Municipal Police Employees' Retirement System v. Wynn (2016) ca9 · cites it 2× “Nev. Rev. Stat. § 78.138 (7)(b). The complaint acknowledges that Steve Wynn had obtained a legal opinion blessing the donation, but alleges that the directors did not request to see the opinion before the vote.”

Glenbrook Capital Ltd. Partnership v. Dodds (2011) nev · cites it 4× “Pursuant to Nevada’s business judgment rule set forth in NRS 78.138, directors and officers benefit from the “‘presumption that in making a business decision [they] .”

In Re Amerco Derivative Litigation (2011) nev · cites it 4× “Pursuant to Nevada's business judgment rule set forth in NRS 78.138, directors and officers benefit from the "`presumption that in making a business decision [they] .”

Hilton Hotels Corp. v. ITT Corp. (1997) nvd · cites it 5× “§ 78.138 addresses several powers of a corporate board in undertaking defensive measures to resist a hostile takeover, nothing in the Nevada statutes, or elsewhere in the law of Nevada, authorizes the incumbent board of a corporation to entrench itself by effectively removing…”

JLL Consultants, Inc. v. Gothner (In re AgFeed USA, LLC) (2016) deb “at 1179 (citing Nev.Rev.Stat. § 78.138 (“Directors and officers shall exercise their powers in good faith and with a view to the interests of the corporation.”

CHUR VS. DIST. CT. (STATE, COMM'R OF INS.) (2020) nev · cites it 60× “We further conclude that the gross negligence-based allegations in the operative complaint below fail to state an actionable claim under NRS 78.138. FACTS AND PROCEDURAL HISTORY Petitioners (collectively, the Directors) formerly served as directors of Lewis & Clark LTC Risk…”

Tsatas v. Airborne Wireless Network, Inc. (2023) nvd · cites it 24× “Whether the FAC Fails to Comply with NRS 78.138(7) and Whether 17 the FAC’s Common Law Causes of Action Would be Subsumed in a 18 NRS 78.”

Rocker v. Centex Corp. (2012) texapp “” See Nev.Rev.Stat. § 78.138(7) (West, Westlaw through 76th Reg.”

WYNN RESORTS, LTD. VS. DIST. CT. (OKADA) (2017) nev · cites it 18× “Nevada's business judgment rule is codified at NRS 78.138, 5 which states, in pertinent part, as follows: 1.”

Show all 45 citing cases →

— Nev. Rev. Stat. § 78.138(1) — 2 cases

PARAMETRIC SOUND CORP. VS. DIST. CT. (RAKAUSKAS) (2017) nev

— Nev. Rev. Stat. § 78.138(2) — 4 cases

WYNN RESORTS, LTD. VS. DIST. CT. (OKADA) (2017) nev “Nevada's business judgment rule is codified at NRS 78.138, 5 which states, in pertinent part, as follows: 1.”

WYNN RESORTS, LTD. VS. DIST. CT. (OKADA) (2017) nev

— Nev. Rev. Stat. § 78.138(3) — 10 cases

Shoen v. SAC Holding Corp. (2006) nev “” 10 In 1991, the Nevada Legislature codified the business judgment rule at NRS 78.138. 11 In managing the corporation’s affairs, the board of directors may generally decide whether to take legal action on the corporation’s behalf.”

GUZMAN VS. JOHNSON (2021) nev “The individual directors and AMC moved to dismiss under NRCP 12(b)(5), arguing that Guzman failed to rebut the business judgment rule under NRS 78.138. Guzman countered that she sufficiently pleaded facts to rebut the business judgment rule by arguing the fiduciaries here were…”

CHUR VS. DIST. CT. (STATE, COMM'R OF INS.) (2020) nev “We further conclude that the gross negligence-based allegations in the operative complaint below fail to state an actionable claim under NRS 78.138. FACTS AND PROCEDURAL HISTORY Petitioners (collectively, the Directors) formerly served as directors of Lewis & Clark LTC Risk…”

Streeter v. Izadi (2021) nvd

IN RE: DISH NETWORK DERIVATIVE LITIG. C/W 69012 (2017) nev

— Nev. Rev. Stat. § 78.138(4) — 1 case

Shoen v. Amerco (1994) nvd

— Nev. Rev. Stat. § 78.138(4)(b) — 1 case

Shoen v. Amerco (1994) nvd

— Nev. Rev. Stat. § 78.138(5) — 2 cases

IN RE: PARAMETRIC SOUND CORP. SHAREHOLDERS' LITIG. C/W 84971, 85358 (2024) nev

— Nev. Rev. Stat. § 78.138(7) — 21 cases

Glenbrook Capital Ltd. Partnership v. Dodds (2011) nev “Pursuant to Nevada’s business judgment rule set forth in NRS 78.138, directors and officers benefit from the “‘presumption that in making a business decision [they] .”

In Re Amerco Derivative Litigation (2011) nev “Pursuant to Nevada's business judgment rule set forth in NRS 78.138, directors and officers benefit from the "`presumption that in making a business decision [they] .”

Tsatas v. Airborne Wireless Network, Inc. (2023) nvd “Whether the FAC Fails to Comply with NRS 78.138(7) and Whether 17 the FAC’s Common Law Causes of Action Would be Subsumed in a 18 NRS 78.”

— Nev. Rev. Stat. § 78.138(7)(2) — 1 case

Solak v. Rochford (2020) nvd

— Nev. Rev. Stat. § 78.138(7)(a) — 2 cases

In Re: Newport Corp. Shareholder Litig. (2022) nev

— Nev. Rev. Stat. § 78.138(7)(b) — 8 cases

In Re Allegiant Travel Co. Stockholder Derivative Litigation (2020) nvd

Tumelson Family Ltd. Partnership v. World Financial News Network (2007) ca9

— Nev. Rev. Stat. § 78.138(7)(b)(1) — 1 case

Streeter v. Izadi (2021) nvd

— Nev. Rev. Stat. § 78.138(7)(b)(2) — 3 cases

Official Committee of Unsecured Creditors of Cash Cloud, INC. v. Christopher Mcalary (2025) nvd

STATE, COMM'R OF INS. v. CHUR C/W 85728 (2025) nev

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