—New Jersey Shareholder
“Pursuant to this standard, a board has fiduciary duty to a cooperative’s shareholders to preserve those shareholders’ interests and rights. That board must act in compliance with the co-op’s bylaws and proprietary lease, and free of fraud, self-dealing, and unconscionability. That board must act reasonably and in good faith.
“The BCL would likely be applied to the director’s actions here. So long as this director is acting in good faith (it’s considered difficult to prove otherwise), the director’s actions are protected. Only through a consideration of more specific facts (i.e., whether the director is disclosing his/her position, the circumstances of his/her role in admission decisions or votes, his/her role in and/or influence on that co-op’s admissions committee) can it be determined whether this dual role constitutes a fiduciary duty breach. Ultimately, the BCL maintains a very high threshold of protection for directors such that establishing a violation is very difficult.
“In conclusion, the simple dual role described in this Q&A does not, in and of itself, constitute a breach of the director’s fiduciary duty. The conduct of the director in these roles is determinative.”