Also known as: qualified director
Written by attorneys · grounded in primary & secondary sources — see below
Directors who are both disinterested in and independent with respect to a specified transaction or proceeding. The category excludes any director nominated or elected by an interested party and any director who serves on the board of another corporation alongside a non-qualified director.
Select any source to read its text and confirm it supports the definition.
Quoc Quan and Queenie Quinones, two qualified directors of Quantum Dynamics, attend a board meeting at which a quorum of qualified directors is present. They vote to determine that continuing a derivative suit against the CEO is not in the corporation's best interests. The court later dismisses the suit on the corporation's motion.
Quinton Quimby files a derivative action against Quantum Dynamics directors. The board's qualified directors vote to dismiss. Quinton alleges with particularity that a majority of the board lacked qualified status at the time of the vote. The corporation must then prove that the determination satisfied the statutory requirements.
Quiana Qualls and two other qualified directors of Quokka Apparel deliberate outside the presence of any non-qualified directors on a supply contract with a company owned by a fellow director's relative. They vote to approve the transaction. The affirmative vote of a majority of qualified directors insulates the deal from attack.
Quentin Quach and two other qualified directors of Quasar Technologies constitute a majority of the qualified directors on the board. They meet to authorize a related-party lease. Their number satisfies the quorum requirement even though non-qualified directors are absent.
Quiana Quach, an officer of Quincy Manufacturing, presents a new product line opportunity to the board. The qualified directors, acting under the procedures of section 8.62, formally disclaim the corporation's interest. Quiana then pursues the opportunity personally without liability.
The board of Quantum Dynamics appoints a two-director committee of qualified directors to evaluate a pending derivative claim. The committee votes to recommend dismissal. The court grants the corporation's motion because the committee satisfied the statutory criteria.
A director must be disinterested in the matter and independent of any person who has a material interest. Nomination or election by an interested party or service on another board with a non-qualified director disqualifies the individual.
Supporting sources
The transaction must receive the affirmative vote of a majority of qualified directors, but no fewer than two, after they deliberate and vote without participation by non-qualified directors.
Supporting sources
When qualified directors or a committee of qualified directors makes the determination, the plaintiff ordinarily bears the burden of proving that the requirements for dismissal were not met. The burden shifts to the corporation only if the plaintiff alleges with particularity that the board lacked a majority of qualified directors.
Supporting sources
Yes. The court may appoint one or more individuals to determine whether maintaining the suit serves the corporation's best interests. In that circumstance the corporation bears the burden of proving the panel acted independently, in good faith, and after reasonable inquiry.
Supporting sources
The officer or director must first present all material facts concerning the opportunity to the corporation. Only then may qualified directors, following the procedures of section 8.62, disclaim the corporation's interest.
Supporting sources