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California Corporations Code Section 309

Legal Research Home > California Laws > Corporations Code > California Corporations Code Section 309

309.  (a) A director shall perform the duties of a director,
including duties as a member of any committee of the board upon which
the director may serve, in good faith, in a manner such director
believes to be in the best interests of the corporation and its
shareholders and with such care, including reasonable inquiry, as an
ordinarily prudent person in a like position would use under similar
circumstances.
   (b) In performing the duties of a director, 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 any of the following:
    (1) One or more officers or employees of the corporation whom the
director believes to be reliable and competent in the matters
presented.
    (2) Counsel, independent accountants or other persons as to
matters which the director believes to be within such person's
professional or expert competence.
    (3) A committee of the board upon which the director does not
serve, as to matters within its designated authority, which committee
the director believes to merit confidence,

so long as, in any such case, the director acts in good faith, after
reasonable inquiry when the need therefor is indicated by the
circumstances and without knowledge that would cause such reliance to
be unwarranted.
   (c) A person who performs the duties of a director in accordance
with subdivisions (a) and (b) shall have no liability based upon any
alleged failure to discharge the person's obligations as a director.
In addition, the liability of a director for monetary damages may be
eliminated or limited in a corporation's articles to the extent
provided in paragraph (10) of subdivision (a) of Section 204.

Last modified: February 22, 2013