N.Y. Laws » CHAPTER Business Corporation / ARTICLE Directors and Officers
New York Consolidated Laws

N.Y. Business Corporation Law § 717 (2026)

Duty of directors

✓ text as retrieved May 2026 (this copy records no edition or section history)
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§ 717. Duty of directors.
  (a) A director shall perform his duties as a director, including his
duties as a member of any committee of the board upon which he may
serve, in good faith and with that degree of care which an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements including financial
statements and other financial data, in each case prepared or presented
by:
  (1) one or more officers or employees of the corporation or of any
other corporation of which at least fifty percentum of the outstanding
shares of stock entitling the holders thereof to vote for the election
of directors is owned directly or indirectly by the corporation, whom
the director believes to be reliable and competent in the matters
presented,
  (2) counsel, public accountants or other persons as to matters which
the director believes to be within such person's professional or expert
competence, or
  (3) a committee of the board upon which he does not serve, duly
designated in accordance with a provision of the certificate of
incorporation or the by-laws, as to matters within its designated
authority, which committee the director believes to merit confidence,
so long as in so relying he shall be acting in good faith and with such
degree of care, but he shall not be considered to be acting in good
faith if he has knowledge concerning the matter in question that would
cause such reliance to be unwarranted. A person who so performs his
duties shall have no liability by reason of being or having been a
director of the corporation.
  (b) In taking action, including, without limitation, action which may
involve or relate to a change or potential change in the control of the
corporation, a director shall be entitled to consider, without
limitation, (1) both the long-term and the short-term interests of the
corporation and its shareholders and (2) the effects that the
corporation's actions may have in the short-term or in the long-term
upon any of the following:
  (i) the prospects for potential growth, development, productivity and
profitability of the corporation;
  (ii) the corporation's current employees;
  (iii) the corporation's retired employees and other beneficiaries
receiving or entitled to receive retirement, welfare or similar benefits
from or pursuant to any plan sponsored, or agreement entered into, by
the corporation;
  (iv) the corporation's customers and creditors; and
  (v) the ability of the corporation to provide, as a going concern,
goods, services, employment opportunities and employment benefits and
otherwise to contribute to the communities in which it does business.
  Nothing in this paragraph shall create any duties owed by any director
to any person or entity to consider or afford any particular weight to
any of the foregoing or abrogate any duty of the directors, either
statutory or recognized by common law or court decisions.
  For purposes of this paragraph, "control" shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of the corporation, whether through the
ownership of voting stock, by contract, or otherwise.
Notes of Decisions
Cited in 19 cases (2 in the last 5 years), 1978–2026 · leading case: Barbour v. Knecht, 296 A.D.2d 218 (N.Y. App. Div. 1st Dep't 2002).
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Barbour v. Knecht, 296 A.D.2d 218 (N.Y. App. Div. 1st Dep't 2002). · cites it 2× “The first and second, brought individually, allege tortious interference with contract against all the defendants; the third, brought individually, alleges breach of fiduciary duty under Business Corporation Law § 717 against the individual defendants only; the fourth, brought…”
A.J. Temple Marble & Tile, Inc. v. Union Carbide Marble Care, Inc., 663 N.E.2d 890 (N.Y. 1996). · cites it 2× “Unlike a lower-level employee who materially aided in a violation of the Act by providing false financial information without knowing its import, the likelihood that a high-level executive such as a director — charged with the duty of good faith and reasonable care with respect…”
Marx v. Akers, 666 N.E.2d 1034 (N.Y. 1996). “"A director shall perforin his duties as a director * * * in good faith and with that degree of care which an ordinarily prudent person in a like position would use under similar circumstances” (Business Corporation Law § 717 [a]; see also, Auerbach, 47 NY2d, at 629 [observing…”
Giblin v. Murphy, 532 N.E.2d 1282 (N.Y. 1988). “The individual defendants do not dispute that they owed plaintiff a fiduciary duty, as directors, to protect his continuing ownership interest in the stock of Westwood (see also, Business Corporation Law § 717; Alpert v Williams St.”
Bd. of Managers of Fairways at North Hills Condo. v. Fairway at North Hills, 193 A.D.2d 322 (N.Y. App. Div. 2d Dep't 1993). “The "fiduciary” duty contemplated here is akin to that enunciated in Business Corporation Law § 717, namely, that the members of an initial board of managers of a condominium must perform their duties "in good faith and with that degree of care which an ordinary prudent person…”
Buffalo Forge Co. v. Ogden Corp., 555 F. Supp. 892 (W.D.N.Y. 1983). “The attorneys and Kidder were experienced in merger and acquisition transactions and could lend a professional expertise to the negotiations that the Individual Defendants, acting alone, could not.”
Bernheim v. 136 East 64th Street Corp., 128 A.D.2d 434 (N.Y. App. Div. 1st Dep't 1987). “plaintiffs-appellants tenants-shareholders against the defendants-respondents cooperative corporation and members of its board of directors, modified, on the law, to reinstate the first cause of action which alleges a breach of a fiduciary duty on the part of the board of…”
Plotnik v. Greenberg, 206 A.D.2d 963 (N.Y. App. Div. 4th Dep't 1994). “We conclude that Plotnik is entitled to summary judgment establishing defendants’ liability in action No. 2. An officer or director of a corporation stands in a fiduciary relationship to it, and thus must discharge his duties diligently and in good faith (see, Business…”
Gargano v. V.C.&J. Constr. Corp., 148 A.D.2d 417 (N.Y. App. Div. 2d Dep't 1989). “The plaintiffs charge that this was a misuse of a corporate opportunity (Business Corporation Law § 717; Blaustein v Pan Am.”
Renz v. Beeman, 589 F.2d 735 (2d Cir. 1978). “2d 123 (1967); N.Y.Business Corp.Law § 717 (McKinney 1963).”
Crane, A.G. v. 206 West 41st Street Hotel Assocs., L.P., 87 A.D.3d 174 (N.Y. App. Div. 1st Dep't 2011). “, whether plaintiff is an affiliate of Lucas or simply his alter ego, and whether Lucas seeks to block *184 the LP from defending the foreclosure to serve his own interests, rather than the LP’s.”
NBT Bancorp, Inc. v. Fleet/Norstar Fin. Grp., Inc., 159 A.D.2d 902 (N.Y. App. Div. 3d Dep't 1990). “Allegations that Central breached the merger agreement by adjourning the special shareholders’ meeting to consider defendants’ offer are totally inadequate to support the cause of action for tortious inducement of breach of contract. It would have been a breach of the Board’s…”
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