Corporate Interested-Director Transaction Requirements in Oklahoma
At a glance
| Governing law, entity, transaction, and covered-person scope | Current 18 O.S. § 1030 through Oct. 31, 2026; contract/transaction between corporation and director/officer, or corporation and another entity where director/officer holds office or financial interest. No direct/indirect, materiality, subsidiary, or proposed-transaction formula stated; Nov. 1 amendment broadens scope (§ 1030(A); 2026 O.S.L. ch. 304 § 5) |
|---|---|
| Interest, relationship, control, and materiality definitions | Current section uses director/officer relationship, interest, common office, or financial interest without defining materiality, control, related person, disinterested, or independence. Nov. 1 amendment defines control group, controlling shareholder, disinterested director/shareholder, going-private transaction, material interest, and material relationship (§ 1030(A); ch. 304 § 5(D)-(E)) |
| Required disclosure, facts, timing, knowledge, and recipients | Current board/shareholder routes require material relationship-or-interest and contract/transaction facts disclosed or known; no director-source, writing, confidentiality, or timing rule stated. Nov. 1 board route adds initiation/negotiation/approval involvement and disclosure/knowledge by all board or committee members (§ 1030(A)(1)-(2); ch. 304 § 5(A)(1)) |
| Disinterested or qualified board/committee composition, quorum, vote, and good faith | Current good-faith affirmative majority of disinterested directors, even below quorum; interested/common directors count toward meeting quorum. No minimum or special committee rule. Nov. 1 adds no-gross-negligence condition and ≥2 all-disinterested committee if board lacks disinterested majority (§ 1030(A)(1), (B); ch. 304 § 5(A)(1)) |
| Disinterested shareholder notice, voting group, quorum, consent, and threshold | Current shareholders entitled to vote specifically approve in good faith; no conflict-specific exclusion, quorum, denominator, or threshold stated. Nov. 1 route becomes informed, uncoerced majority of votes cast by disinterested shareholders and defines that class (§ 1030(A)(2); ch. 304 § 5(A)(2), (E)(5)) |
| Fairness alternative, relevant time, burden, and statutory standard | Current contract/transaction fair to corporation when authorized, approved, or ratified by board/committee/shareholders; no elements or burden stated. Nov. 1 ordinary and control routes use fairness to corporation and shareholders, but enacted text states no express burden (§ 1030(A)(3); ch. 304 § 5(A)(3), (B)(3), (C)(2)) |
| Interested-person presence, participation, vote, abstention, and written consent | Current safe harbor may apply despite interested director/officer presence, participation, or counted vote; interested directors count toward quorum. General board/committee no-meeting action requires all members' written/electronic consent, filed with minutes; no conflict-specific abstention mechanism (§§ 1027(F)(1), 1030(A), (B)) |
| Controlling stockholders, officers, compensation, and special transaction routes | Express current directors/officers and common-office/financial-interest entities; no controlling-shareholder or going-private branch before Nov. 1. Enacted replacement adds alternate committee, disinterested-holder, or fairness routes for control transactions, and dual approval or fairness for going-private transactions (§ 1030; ch. 304 § 5(B)-(C)) |
| Statutory effect, remedies, records, fiduciary, and public-company boundaries | Current qualifying route means contract/transaction not void/voidable solely for listed interest, presence, participation, or vote grounds. Records may be electronic if paper-convertible. Nov. 1 shifts to interest-based equitable-relief/damages limits, preserves authorization/governing-record/governmental-plan, change-of-control injunction, and aiding/abetting grounds, and adds listed-company presumption (§§ 1030, 1069; ch. 304 § 5(D)) |
Requirements one by one
Current director and committee approval
Through October 31, 2026, § 1030(A)(1) requires disclosure or knowledge of the material relationship-or-interest facts and transaction facts by the board or committee. Good-faith authorization then takes the affirmative votes of a majority of disinterested directors, even when that group is smaller than a quorum. For a five-director board with two disinterested directors, both would need to approve under that route; interested directors may count toward the meeting quorum under § 1030(B).
The statute covers a corporation's transaction with its director or officer and specified entities in which a director or officer has another role or a financial interest. It protects against voidability solely because of those covered interests, meeting participation, or a counted interested vote when one statutory route is met.
Current shareholder approval and fairness alternatives
Section 1030(A)(2) separately permits good-faith, specific shareholder approval after the material facts are disclosed to or known by shareholders entitled to vote. Current text does not impose the future disinterested- shareholder votes-cast test. Section 1030(A)(3) instead asks whether the transaction is fair to the corporation when the board, committee, or shareholders authorize, approve, or ratify it.
If the board or committee acts without a meeting, § 1027(F)(1) requires all members to consent in writing or electronically and to file the consents with the minutes. Section 1069 permits an electronic minute book if its records can be converted to clearly legible paper within a reasonable time.
November 1 replacement
Under 2026 O.S.L. ch. 304 (HB 3498), Sections 5 and 24, the published future § 1030(A)(1)-(3) expands the ordinary route to covered acts and transactions involving directors, officers, subsidiaries, and more entity relationships. Its board route requires disclosure or knowledge by all members, good faith without gross negligence, and a disinterested-director majority. If the board lacks a disinterested majority, the specified route uses a committee of at least two board-determined disinterested directors.
The future shareholder route uses an informed, uncoerced majority of votes cast by disinterested shareholders. The fairness alternative refers to both the corporation and its shareholders. Separate future provisions address controlling-shareholder and going-private transactions; those require their own committee, shareholder, or fairness analysis. The future act also preserves specified independent authorization and relief grounds.
What trips people up
Approval of HB 3498 in May did not start its replacement § 1030. The current text governs through October 31; the new conditions begin November 1, 2026.
The current conflict safe harbor has a narrow effect: it removes voidability solely for the listed interest or participation reasons when a statutory route is met. It does not establish that the underlying transaction was otherwise authorized or fair.
Common questions
Can one interested director sign for a board consent today?
Under § 1027(F)(1), board action without a meeting requires all members' consent. Current § 1030 supplies no separate omitted-signature route for a conflict transaction; the approval record must satisfy both applicable provisions.
Will the November statute bar every challenge to a transaction?
No. Chapter 304's future § 1030 preserves specified claims based on other authorization defects, governing documents, governmental instruments, change-of-control injunctive review, and knowing aid of a director's fiduciary breach.
Statutes and sources
- 18 O.S. § 1027(F)(1) — board and committee consent and minute filing. Official Oklahoma Statutes text, accessed October 6, 2026.
- 18 O.S. § 1030 — current interested-director/officer scope, approval routes, fairness time, presence, voting, quorum, and statutory effect. Official Oklahoma Statutes text, accessed October 6, 2026.
- 18 O.S. § 1069 — corporate-record form. Official Oklahoma Statutes text, accessed October 6, 2026.
- 2026 O.S.L. chapter 304 (HB 3498), §§ 5 and 24 — enacted replacement § 1030, May 12 approval, and November 1, 2026 effective date. Official Oklahoma session law, accessed October 6, 2026.
Source links
Every statute quoted above, linked, with the date we checked it.
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