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<law><site_title>Virginia Decoded</site_title><site_url>https://vacode.org</site_url><law_id>67347</law_id><section_number>13.1-788</section_number><catch_line>Standard of conduct for directors</catch_line><edition url="https://vacode.org/2025/" slug="2025" current="TRUE" last_updated="">2025</edition><structure><unit label="title" level="1" order_by="1" identifier="13.1">Corporations</unit><unit label="chapter" level="2" order_by="1" identifier="9">Virginia Stock Corporation Act</unit><unit label="article" level="3" order_by="1" identifier="22">Benefit Corporations</unit></structure><text>
						<section id="A"><p><span class="prefix-number">A.</span> Subject to &#xA7;&#xA0;<a class="law" title="General standards of conduct for director" href="/13.1-690/">13.1-690</a>, in discharging the duties of their respective positions and in considering the best <span class="dictionary">interests</span> of the <span class="dictionary">benefit corporation</span>, the board of directors, committees of the board, and <span class="dictionary">individual</span> directors of a <span class="dictionary">benefit corporation</span>: <a id="paragraph-244055" class="section-permalink" href="https://vacode.org/13.1-788/#A"><i class="fa fa-link"/></a></p></section>
						<section id="A1" class="indent-1"><p><span class="prefix-number">1.</span> Shall consider the effects of any corporate action upon:
				a. The <span class="dictionary">shareholders</span> of the <span class="dictionary">benefit corporation</span>;
				b. The employees and workforce of the <span class="dictionary">benefit corporation</span>, its subsidiaries, and suppliers;
				c. The <span class="dictionary">interests</span> of customers as beneficiaries of the general or <span class="dictionary">specific public benefit</span> purposes of the <span class="dictionary">benefit corporation</span>;
				d. Community and societal considerations, including those of each community in which offices or facilities of the <span class="dictionary">benefit corporation</span>, its subsidiaries, or suppliers are located;
				e. The local and global environment;
				f. The short-term and long-term <span class="dictionary">interests</span> of the <span class="dictionary">benefit corporation</span>, including benefits that may accrue to the <span class="dictionary">benefit corporation</span> from its long-term plans and the possibility that these <span class="dictionary">interests</span> and the general and <span class="dictionary">specific public benefit</span> purposes of the <span class="dictionary">benefit corporation</span> may be best served by the continued independence of the <span class="dictionary">benefit corporation</span>; and
				g. The ability of the <span class="dictionary">benefit corporation</span> to accomplish its general and any <span class="dictionary">specific public benefit</span> purpose; <a id="paragraph-244056" class="section-permalink" href="https://vacode.org/13.1-788/#A1"><i class="fa fa-link"/></a></p></section>
						<section id="A2" class="indent-1"><p><span class="prefix-number">2.</span> May consider:
				a. The resources; <span class="dictionary">intent</span>; and past, stated, and potential conduct of any <span class="dictionary">person</span> seeking to acquire control of the <span class="dictionary">benefit corporation</span>; and
				b. Other pertinent factors or the <span class="dictionary">interests</span> of any other <span class="dictionary">person</span> that they deem appropriate; and <a id="paragraph-244057" class="section-permalink" href="https://vacode.org/13.1-788/#A2"><i class="fa fa-link"/></a></p></section>
						<section id="A3" class="indent-1"><p><span class="prefix-number">3.</span> Need not give priority to the <span class="dictionary">interests</span> of a particular <span class="dictionary">person</span> referred to in subdivisions 1 and 2 over the <span class="dictionary">interests</span> of any other <span class="dictionary">person</span> unless the <span class="dictionary">benefit corporation</span> has stated its intention to give priority to <span class="dictionary">interests</span> related to a <span class="dictionary">specific public benefit</span> purpose identified in its articles. <a id="paragraph-244058" class="section-permalink" href="https://vacode.org/13.1-788/#A3"><i class="fa fa-link"/></a></p></section>
						<section id="B"><p><span class="prefix-number">B.</span> The consideration of interests and factors in the manner required by subsection A shall not constitute a violation of &#xA7; <a class="law" title="General standards of conduct for director" href="/13.1-690/">13.1-690</a> or a director <span class="dictionary">conflict of interests</span> under &#xA7; <a class="law" title="Director conflict of interests" href="/13.1-691/">13.1-691</a>. <a id="paragraph-244059" class="section-permalink" href="https://vacode.org/13.1-788/#B"><i class="fa fa-link"/></a></p></section>
						<section id="C"><p><span class="prefix-number">C.</span> In any <span class="dictionary">proceeding</span> brought by or in the right of a <span class="dictionary">benefit corporation</span> or brought by or on behalf of the <span class="dictionary">shareholders</span> of a <span class="dictionary">benefit corporation</span>, a director is not personally liable for monetary <span class="dictionary">damages</span> for: <a id="paragraph-244060" class="section-permalink" href="https://vacode.org/13.1-788/#C"><i class="fa fa-link"/></a></p></section>
						<section id="C1" class="indent-1"><p><span class="prefix-number">1.</span> Any action taken as a director if the director performed the duties of office in compliance with &#xA7; <a class="law" title="General standards of conduct for director" href="/13.1-690/">13.1-690</a> and this section; or <a id="paragraph-244061" class="section-permalink" href="https://vacode.org/13.1-788/#C1"><i class="fa fa-link"/></a></p></section>
						<section id="C2" class="indent-1"><p><span class="prefix-number">2.</span> Failure of the <span class="dictionary">benefit corporation</span> to create <span class="dictionary">general public benefit</span> or any <span class="dictionary">specific public benefit</span> specified in its <span class="dictionary">articles of incorporation</span> or bylaws or otherwise adopted by the board of directors. <a id="paragraph-244062" class="section-permalink" href="https://vacode.org/13.1-788/#C2"><i class="fa fa-link"/></a></p></section></text><history>2011, c. 698.</history><metadata></metadata></law>
