board of directors

See also Index, standard for board/director/ARC decisions.

A Utah nonprofit corporation must have a board of directors.  The board is the unit ultimately responsible for managing the business and affairs of the corporation (the association). 

A board is required to consist of at least three individuals.

The only requirements Utah law places on those who may be elected as directors is that a director must be a natural person and at least 18 years old.  While a corporation's articles of incorporation or bylaws may prescribe further qualifications that a director must meet, further qualifications are not required.  Utah law does not require that a director be a resident of the state of Utah or a member of the corporation.  See Utah Code § 16-6a-802.

A board acts in all instances on behalf of the association, unless the governing documents or the law authorize some other person or the members to act in a specific instance on behalf of the association.  Thus, all corporate powers are exercised by, or under the authority of, and the business and affairs of the association managed under the direction of, the board (except as limited by a governing document or law).  See Utah Code §§ 16-6a-80157-8a-501, and 57-8-59.

Actions must be approved by a majority of directors present at a board meeting where a quorum is present, unless otherwise provided in the governing documents.  See Utah Code § 16-6a-816.  Utah law defines a quorum as a majority of directors in office immediately before the meeting begins, unless a greater number or lower number is set forth in the governing documents.  See id.

Fiduciary Duties.

As defined by Utah law, directors have basic legal obligations or duties that arise from their ultimate responsibility for the business and interests of the association.  The duties establish both the general standards of conduct for a director to follow and also the reviewing standards for a court to use in determining whether a director's actions have been proper in a particular circumstance.  The primary duties imposed by Utah law are the duty of good faith, the duty of care, and the duty of loyalty.  See Utah Code § 16-6a-822(2).

For condominium associations, see also Index, management committee.  A management committee is the board of directors in condo associations for purposes of the Nonprofit Act.{/mprestriction}

Statutes and Cases:

(For reference: 57-8 is the Condo Act, 57-8a is the Community Association Act, 16-6a is the Nonprofit Act)

16-6a-102. Definitions
16-6a-1601. Corporate records
16-6a-801. Requirement for board of directors
16-6a-802. Qualifications of directors
16-6a-803. Number of directors
16-6a-805. Terms of directors generally
16-6a-807. Resignation of directors
16-6a-808. Removal of directors
16-6a-810. Vacancy on board
16-6a-811. Compensation of directors
16-6a-812. Meetings
16-6a-813. Action without meeting
16-6a-814. Notice of meeting
16-6a-815. Waiver of notice
16-6a-816. Quorum and voting
16-6a-817. Committees of the board
16-6a-822. General standards of conduct for directors and officers
16-6a-823. Limitation of liability of directors
16-6a-824. Liability of directors for unlawful distributions
16-6a-825. Conflicting interest transaction
16-6a-902. Authority to indemnify directors
16-6a-903. Mandatory indemnification of directors
16-6a-904. Advance of expenses for directors
16-6a-905. Court-ordered indemnification of directors
16-6a-906. Determination and authorization of indemnification of directors
16-6a-909. Limitations on indemnification of directors
57-8a-102. Definitions
57-8a-501. Board
57-8a-502. Period of administrative control