06.13.140 Director Conflict of Interest.
(1) A conflict of interest transaction is a transaction with the non-profit corporation in which a director of the corporation has a direct or indirect interest. A conflict of interest transaction is not voidable or the basis for imposing liability on the director if the transaction was fair at the time it was entered into or is approved as provided in sections (2) or (3).
(2) A transaction in which a director of a public benefit corporation has a conflict of interest may be approved:
(A) In advance by the vote of the board of directors or a committee of the board if:
(i) The material facts of the transaction and the director’s interest are disclosed or known to the board or committee of the board; and
(ii) The directors approving the transaction in good faith reasonably believe that the transaction is fair to the non-profit corporation; or
(B) Before or after it is consummated; by obtaining approval of the:
(i) Economic Development and Operations Committee; or
(ii) Tribal Council or Court of Competent Jurisdiction in an action of which the Economic Development and Operations Committee and Economic Development and Operations Director is given notice.
(3) A transaction in which a director of a mutual benefit corporation has a conflict of interest may be approved if:
(A) The material facts of the transaction and the director’s interest were disclosed or known to the board of directors or a committee of the board and the board of committee of the board authorized, approved, or ratified the transaction; or
(B) The material facts of the transaction and the director’s interest were disclosed or known to the members and they authorized, approved, or ratified the transaction.
(4) For purposes of this section, a director of the non-profit corporation has an indirect interest in a transaction if
(A) Another entity in which he or she has a material financial interest or in which he or she is a general partner is a party to the transaction; or
(2) Another entity of which he or she is a director, officer, or trustee is a party to the transaction and the transaction is or should be considered by the board of directors of the corporation.
(5) For purposes of sections (2) and (3), a conflict of interest transaction is authorized, approved, or ratified if it receives the affirmative vote of a majority of the directors on the board of directors or on the committee who have no direct or indirect interest in the transaction, but a transaction may not be authorized, approved, or ratified under this section by a single director. If a majority of the directors who have no direct or indirect interest in the transaction vote to authorize, approve, or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of; or a vote cast by, a director with a direct or indirect interest in the transaction does not affect the validity of any action taken under sections (2) and (3) if the transaction is otherwise authorized, approved, or ratified as provided in sections (2) or (3).
(6) For purposes of section (3)(B), a conflict of interest transaction is authorized, approved or ratified if it receives the vote of a majority of the votes entitled to be counted under this subsection. Votes cast by or voted under the control of a director who has a direct or indirect interest in the transaction, and votes cast by or voted under the control of an entity described in section (4)(A), may not be counted in a vote of members to determine whether to authorize, approve, or ratify a conflict of interest transaction under section (3)(B). The vote of these members, however, is counted in determining whether the transaction is approved under other sections of this Chapter. A majority of the voting members, whether or not present, entitled to be counted in a vote on the transaction under this section constitutes a quorum for the purpose of taking action under this Chapter.
(7) The articles, bylaws, or a resolution of the board may impose additional requirements on conflict of interest transactions.