BILL REQ. #:  S-0609.1 

Read first time 01/16/2007.   Referred to Committee on Judiciary.

     AN ACT Relating to the considerations of corporate directors in exercising their duties; and amending RCW 23B.08.300.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 23B.08.300 and 1989 c 165 s 97 are each amended to read as follows:
     (1) A director shall discharge the duties of a director, including duties as member of a committee:
     (a) In good faith;
     (b) With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and
     (c) In a manner the director reasonably believes to be in the best interests of the corporation.
     (2) In discharging the duties of a director, a director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:
     (a) One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented;
     (b) Legal counsel, public accountants, or other persons as to matters the director reasonably believes are within the person's professional or expert competence; or
     (c) A committee of the board of directors of which the director is not a member if the director reasonably believes the committee merits confidence.
     (3) A director is not acting in good faith if the director has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (2) of this section unwarranted.
     (4) A director is not liable for any action taken as a director, or any failure to take any action, if the director performed the duties of the director's office in compliance with this section.
     (5) In the exercise of their duties, the directors of the corporation may, in determining what they believe to be in the best interests of the corporation, give due consideration to the social, legal, economic, and environmental effects of their decisions and potential decisions on employees, customers, and suppliers of the corporation, and on the communities and geographical areas in which the corporation and its subsidiaries operate, the economy of the state and nation, and the long-term as well as short-term interests of the corporation and its shareholders.