BILL NUMBER: AB 2944	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Leno

                        FEBRUARY 22, 2008

   An act to amend Section 309 of the Corporations Code, relating to
corporations.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2944, as introduced, Leno. Corporations: director's duties.
   Under existing law, a director of a corporation is required to
perform the duties of a director in good faith and in a manner that
the director believes to be in the best interests of the corporation
and its shareholders, and with the care of an ordinarily prudent
person.
   This bill would specify that, in considering the best interests of
the corporation, the director may consider the interests of the
corporation's employees, the impact on the community, and the
environment.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 309 of the Corporations Code is amended to
read:
   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
  that the  director believes to be in the best
interests of the corporation and its shareholders and with 
such   the  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) 
    (1)    One or more officers or employees of the
corporation whom the director believes to be reliable and competent
in the matters presented. 
  (2) 
    (2)    Counsel, independent accountants  ,
 or other persons as to matters  which  
that  the director believes to be within  such 
 the  person's professional or expert competence. 
  (3) 
    (3)    A committee of the board upon which the
director does not serve, as to matters within its designated
authority,  which committee   where  the
director believes  the committee  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
  the  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  of
incorporation  to the extent provided in paragraph (10) of
subdivision (a) of Section 204. 
   (d) In performing the duties of a director in accordance with
subdivisions (a) and (b), a director may, in considering the best
interests of the corporation, consider any or all of the following:
 
   (1) The interest of the corporation's employees.  
   (2) The impact on the community.  
   (3) The environment.