Regulatory Alerts2005-04-11
Relation and Liability of Directors and Officers
The Louisiana Legislature enacted Section 786 to establish the fiduciary duties and personal liability standards for directors and officers of financial institutions. The statute limits monetary damages to instances of gross negligence or greater disregard, including intentional torts and loyalty breaches, while fully protecting directors who rely in good faith on institutional records and qualified experts. Operating as the exclusive governing law for these relationships, it also permits courts to award attorney fees and damages against parties who unsuccessfully attempt to impose higher liability standards.
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