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§ 308B.455 Standard Of Conduct

Statute text

Extracted from the Revisor of Statutes; first captured here October 15, 2026. Formatting and whitespace are normalized. Extraction can contain errors; the linked official text controls.

Subdivision 1. Standard and liability.

A director shall discharge the duties of the position of director in good faith, in a manner the director reasonably believes to be in the best interests of the cooperative, and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. A person who so performs those duties is not liable by reason of being or having been a director of the cooperative.

Subdivision 2. Reliance.

(a) A director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, in each case prepared or presented by:

(1) one or more officers or employees of the cooperative who the director reasonably believes to be liable and competent in the matters presented;

(2) counsel, public accountants, or other persons as to matters that the director reasonably believes are within the person's professional or expert competence; or

(3) a committee of the board upon which the director does not serve, duly established by the board, as to matters within its designated authority, if the director reasonably believes the committee to merit confidence.

(b) Paragraph (a) does not apply to a director who has knowledge concerning the matter in question that makes the reliance otherwise permitted by paragraph (a) unwarranted.

Subdivision 3. Presumption of assent and dissent.

A director who is present at a meeting of the board when an action is approved by the affirmative vote of a majority of the directors present is presumed to have assented to the action approved, unless the director:

(1) objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and does not participate in the meeting after the objection, in which case the director is not considered to be present at the meeting for any purpose of this chapter;

(2) votes against the action at the meeting; or

(3) is prohibited by a conflict of interest from voting on the action.

Subdivision 4. Considerations.

In discharging the duties of the position of director, a director may, in considering the best interests of the cooperative, consider the interests of the cooperative's employees, customers, suppliers, and creditors, the economy of the state, and long-term as well as short-term interests of the cooperative and its patron members, including the possibility that these interests may be best served by the continued independence of the cooperative.

History: 2003 c 105 art 1 s 33

Notes & interpretation Not part of the law

Verified against sources: October 15, 2026Last edited: October 16, 2026

In plain language#

A director's duty has three elements: good faith, a reasonable belief that the director is acting in the cooperative's best interests, and ordinary prudent care. A director who performs those duties "is not liable by reason of being or having been a director." P1, § 308B.455, subd. 1

Subdivision by subdivision#

Subd. 1 – Standard and liability. "In good faith, in a manner the director reasonably believes to be in the best interests of the cooperative, and with the care an ordinarily prudent person in a like position would exercise under similar circumstances."

Subd. 2 – Reliance.

  • (a) A director may rely on information, opinions, reports or statements, including financial statements, prepared or presented by (1) officers or employees whom the director reasonably believes to be “liable and competent” in the matters presented (the published wording, not silently changed to “reliable”); (2) counsel, public accountants or others on matters reasonably believed within their professional or expert competence; or (3) a duly established board committee on which the director does not serve, within its designated authority, if reasonably believed to merit confidence.
  • (b) Reliance is not available to a director who has knowledge that makes it unwarranted.

Subd. 3 – Presumption of assent. A director present when an action is approved by a majority of the directors present is presumed to have assented, unless the director (1) objects at the beginning of the meeting that it was not lawfully called or convened and does not participate afterward, (2) votes against the action at the meeting, or (3) is prohibited by a conflict of interest from voting on it.

Subd. 4 – Considerations. In judging the cooperative's best interests, a director may consider the interests of employees, customers, suppliers and creditors, the economy of the state, and the long-term as well as short-term interests of the cooperative and its patron members, "including the possibility that these interests may be best served by the continued independence of the cooperative."

How it works in practice#

  • The presumption in subd. 3 is why minutes should record dissent. "Votes against" has to happen "at the meeting" under subd. 3(2). The section does not mention abstaining.
  • Committee members count as directors for this section: § 308B.451, subd. 6.
  • Subd. 4 permits, but does not require, a director to weigh the listed interests. The fiduciary duty remains to the cooperative and all members collectively (§ 308B.401).
  • Related protections: the articles or bylaws may limit monetary liability within the limits of § 308B.465; indemnification is in § 308B.471; conflicts in § 308B.461.

Sources

  • P1 Minnesota Statutes, Chapter 308B (Cooperative Associations), Office of the Revisor of Statutes, State of Minnesota. revisor.mn.gov (primary; accessed October 15, 2026)

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