{"data":{"id":"us-ky/krs-271b.8-420","jurisdiction":"us-ky","citation":"KRS 271B.8-420","heading":"Standards of conduct for officers.","body":"(1) An officer with discretionary authority shall discharge his duties under that\nauthority:\n(a) In good faith;\n(b) On an informed basis; and\n(c) In a manner he honestly believes to be in the best interests of the corporation.\n(2) An officer shall be considere d to discharge his duties on an informed basis if he\nmakes, with the care an ordinarily prudent person in a like position would exercise\nunder similar circumstances, inquiry into the business and affairs of the corporation,\nor into a particular action to be taken or decision to be made.\n(3) In discharging his duties an officer shall be entitled to rely on information, opinions,\nreports, or statements, including financial statements and other financial data, if\nprepared or presented by:\n(a) One (1) or more o fficers or employees of the corporation whom the officer\nhonestly believes to be reliable and competent in the matters presented; or\n(b) Legal counsel, public accountants, or other persons as to matters the officer\nhonestly believes are within the person's professional or expert competence.\n(4) An officer shall not be considered to be acting in good faith if he has knowledge\nconcerning the matter in question that makes reliance otherwise permitted by\nsubsection (3) of this section unwarranted.\n(5) Any action taken as an officer, or any failure to take any action as an officer, shall\nnot be the basis for monetary damages or injunctive relief unless:\n(a) The officer has breached or failed to perform his duties in compliance with\nthis section; and\n(b) In the case of an action for monetary damages, the breach or failure to perform\nconstitutes willful misconduct or wanton or reckless disregard for the best\ninterests of the corporation or its shareholders.\n(6) A person bringing an action or monetary damages under t his section shall have the\nburden of proving by clear and convincing evidence the provisions of subsection\n(5)(a) and (b) of this section, and the burden of proving that the breach or failure to\nperform was the legal cause of damages suffered by the corporation.\n(7) Nothing in this section shall eliminate or limit the liability of any officer for any act\nor omission occurring prior to July 15, 1988.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=13395","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:53:19Z","sha256":"574f188438638ae3fa736cb54f89c8e743b2d80d8f0d3875111523dab702de98","source_id":"us-ky","stale":false,"prev":"us-ky/krs-271b.8-410","next":"us-ky/krs-271b.8-430"},"notice":"GroundRules: Original legal text. Not legal advice."}