{"data":{"id":"us-ky/krs-381.9170","jurisdiction":"us-ky","citation":"KRS 381.9170","heading":"Discharge of board member's duties -- Standards for monetary damages","body":"and injunctive relief.\n(1) A board member shall discharge his or her duties as an officer or a member of the\nexecutive board, including his or her duties as a member of a committee:\n(a) In good faith;\n(b) On an informed basis; and\n(c) In a manner he or she honestly believes to be in the best interests of the\ncorporation.\n(2) Such board member shall be considered to discharge his or her duties on an\ninformed basis if he or she makes, with the care an ordinarily prudent person in a\nlike position would exercise under similar circumstances, inquiry into the business\nand affairs of the association, or into a particular action to be taken or decision to be\nmade.\n(3) In discharging his or he r duties, such board member shall be entitled to rely on\ninformation, opinions, reports, or statements, including financial statements and\nother financial data, if prepared or presented by:\n(a) One (1) or more officers or employees of the association whom the board\nmember honestly believes to be reliable and competent in the matters\npresented;\n(b) Legal counsel, public accountants, or other persons as to matters the director\nhonestly believes are within the person's professional or expert competence; or\n(c) A committee of the executive board of which he or she is not a member if the\nboard member honestly believes the committee merits confidence.\n(4) A board member of an association shall not be considered to act in good faith if he\nor she has knowledge conce rning the matter in question that makes reliance\notherwise permitted by subsection (3) of this section unwarranted.\n(5) In addition to any other limitation on such board member's liability for monetary\ndamages contained in any provision of the association' s articles of incorporation\nadopted in accordance with state law, any action taken as a board member, or any\nfailure to take any action as a board member, shall not be the basis for monetary\ndamages or injunctive relief unless:\n(a) The board member has bre ached or failed to perform the duties of the board\nmember's office in compliance with this 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 h uman\nrights, safety, or property.\n(6) A person bringing an action for monetary damages under this 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 provi ng that the breach or failure to\nperform was the legal cause of the damages suffered.","path":["KRS Chapter 381"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=40018","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:12Z","sha256":"b7896cc3a28c7df7e8c732b644cce2af1ad26991d881e8bd3281ee0f0cb815b9","source_id":"us-ky","stale":false,"prev":"us-ky/krs-381.9169","next":"us-ky/krs-381.9171"},"notice":"GroundRules: Original legal text. Not legal advice."}