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Tenn. Code Ann. § 48-18-403

Standards of conduct for officers

Applied in 3 court decisions — leading case Nelson v. Martin (1997)

Most recently applied in 387 F. Supp. 2d 770 - May v. National Bank of Commerce (October 2004)

Acts 1986, ch. 887, § 8.42; 1994, ch. 776, § 34.

How often courts cite this section

19942000200410
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) An officer with discretionary authority shall discharge all duties under that authority: 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 officer reasonably believes to be in the best interest of the corporation.

(4) In discharging such 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: One (1) or more officers or employees of the corporation (or a subsidiary of the corporation) whom the officer reasonably believes to be reliable and competent in the matters presented; or

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

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

(7) An officer is not liable for any action taken as an officer, or any failure to take any action, if the officer performed the duties of 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.