ND HB1164

Directors must discharge their duties in good faith, in the best interests of the financial institution, and with the care an ordinarily prudent person would exercise under similar circumstances.

Directors may rely on information, opinions, and financial statements prepared by institution officers and employees, external counsel and accountants, or board committees that they reasonably believe to be reliable and competent, unless the director has specialized knowledge that makes such reliance unwarranted.

Directors present at board meetings are presumed to have assented to majority-approved actions unless they object to the meeting's legality, vote against the action, or are prohibited from voting by articles, bylaws, or conflict of interest policies.

Articles of incorporation may eliminate or limit director liability for monetary damages for breach of fiduciary duty, but cannot eliminate liability for breach of loyalty, acts not in good faith, intentional misconduct, knowing violations of law, illegal distributions, or improper personal benefits.

When considering the financial institution's best interests, directors may consider the interests of employees, customers, suppliers, creditors, state and national economy, community considerations, and both long-term and short-term institutional interests including the possibility of maintaining the institution's independence.