381.9170 Discharge of board member's duties -- Standards for monetary damages
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/ky/381-9170A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
and injunctive relief.
(1)A board member shall discharge his or her duties as an officer or a member of the
executive board, including his or her duties as a member of a committee:
(a)In good faith;
(b)On an informed basis; and
(c)In a manner he or she honestly believes to be in the best interests of the
corporation.
(2)Such board member shall be considered to discharge his or her duties on an
informed basis if he or she 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 association, or into a particular action to be taken or decision to be
made.
(3)In discharging his or her duties, such board member 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 association whom the board
member 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 executive board of which he or she is not a member if the
board member honestly believes the committee merits confidence.
(4)A board member of an association shall not be considered to act in good faith if he
or she 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 such board member's liability for monetary
damages contained in any provision of the association's articles of incorporation
adopted in accordance with state law, any action taken as a board member, or any
failure to take any action as a board member, shall not be the basis for monetary
damages or injunctive relief unless:
(a)The board member has breached or failed to perform the duties of the board
member'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 human
rights, safety, or property.
(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 the damages suffered.