Reliance & Duty of Care

Section 5231(b) of the California Corporations Code generally provides that directors may rely upon information, opinions, reports, financial statements and other financial data prepared or presented by (1) corporate officers or employees; (2) counsel, independent accountants and others with professional or expert competence; or (3) board committees on which the director does not serve; provided, however that (a) the director acts in good faith after reasonable inquiry when the need therefor is indicated by the circumstances, and (b) the director reasonably believes that the provider of such information or opinion is competent and reliable with respect to, and authorized to provide, such information or opinion, and that such reliance is otherwise warranted.