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Tenn. Code Ann. § 48-18-301

General standards for directors

Applied in 4 court decisions — leading case Nelson v. Martin (1997)

Most recently applied in Franklin Capital Associates, L.P. v. Almost Family, Inc. (December 2005)

Acts 1986, ch. 887, § 8.30; 1994, ch. 776, § 32.

How often courts cite this section

19932000200510
citing decisions per year

Court decisions citing this, by year. The dip in the last several years is a data-coverage gap, not a real trend — our corpus holds fewer opinions from the most recent years, so recent citations are undercounted.

(1) A director shall discharge all duties as a director, including duties as a member of a committee: In good faith;

(2) With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and

(3) In a manner the director reasonably believes to be in the best interests of the corporation.

(4) In discharging such duties, a director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by: One (1) or more officers or employees of the corporation (or a subsidiary of the corporation) whom the director reasonably believes to be reliable and competent in the matters presented;

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

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

(7) A director is not acting in good faith if the director has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) unwarranted.

(8) A director is not liable for any action taken as a director, or any failure to take any action, if the director performed the duties of the office in compliance with this section.

Current official text: Tennessee Code (LexisNexis). Digitized from the UniCourt Code Improvement Commission public-domain capture. Reproduced from public-domain Tennessee statutes; confirm against the official source for the current text. Not legal advice.