A director shall discharge the duties of the position as a director, including duties as a member of a committee, in good faith, in a manner the director reasonably believes to be in the best interests of the cooperative, and with the care an ordinary prudent person in a like position would exercise under similar circumstances.
A director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by:
One (1) or more officers or employees of the cooperative whom the director reasonably believes to be reliable and competent in the matters presented;
Legal counsel, public accountants, or other persons as to matters that the director reasonably believes are within the person’s professional or expert competence; or
A committee of the board of directors of which the director is not a member, if the director reasonably believes the committee merits confidence.
A director is not acting in good faith if the director has knowledge concerning the matter in question that makes reliance otherwise permitted by subdivision (b)(1) unwarranted.
A director is not liable for any action taken as a director, or any failure to take action, if the director performed the duties of the office in compliance with subsections (a) and (b).
A director’s personal liability to the cooperative or its members for monetary damages for breach of fiduciary duty as a director may be eliminated or limited in the articles or bylaws; such provisions shall not eliminate or limit the liability of a director for the following:
For any breach of the director’s duty or loyalty to the cooperative or its members; however, the articles or bylaws may define the duty loyalty in a manner to reflect the understanding of the parties; provided, that this definition is not manifestly unreasonable under the circumstances;
For acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
Under § 43-38-904; or
For any act or omission occurring before the date when the provision in the articles eliminating or limiting liability becomes effective.
Notwithstanding anything to the contrary in this section, the articles or bylaws may define the standard of conduct for directors in a manner to reflect the understanding of the parties; provided, that this definition is not manifestly unreasonable under the circumstances.
A person alleging a violation of this section has the burden of proving the violation.
