Corporate Interested-Director Transaction Requirements in West Virginia

At a glance

Requirements one by one

Officers and common positions at another entity are covered

W. Va. Code § 31D-8-860 reaches direct contracts with directors or officers and transactions with another organization where they hold office or a financial interest. It supplies no financial-interest materiality floor, although the facts to be disclosed must be material.

The approval routes require knowledge and good faith

Section 31D-8-860(a)(1)-(2) requires material facts about both the relationship or interest and the transaction. Its informed approval routes also require good faith. Knowing only that the other party has a connection with a director is not the complete statutory disclosure condition.

Disinterested approval and committee composition are distinct

The conflict board route uses an affirmative majority of disinterested directors, “even though the disinterested directors be less than a quorum.” Section 31D-8-860(b) lets common or interested directors count for quorum.

Ordinary committee composition comes from § 31D-8-825(a)-(b): at least two members, appointed through the greater of a majority of all directors in office or the governing-document action requirement. The conflict provision does not require both committee members to be disinterested or impose its own two-disinterested-director approving floor.

Fairness is tested at authorization, approval, or ratification

Section 31D-8-860(a)(3) requires fairness “as of the time” the board, committee, or members authorize, approve, or ratify the transaction. It does not define fairness or identify who bears the burden of establishing it.

Written action follows the ordinary unanimous-consent rule

Under § 31D-8-821, unless the articles or bylaws provide otherwise, all directors must take the action and sign written consents describing it. The consents must be included in the minutes or filed with the corporate records. Section 31D-8-825(c) extends that procedure to committees. The conflict section states no special abstaining-signature route.

Director compensation includes a limited expense allowance

Section 31D-8-811 allows the board to fix compensation unless the articles or bylaws provide otherwise and expressly includes a reasonable allowance for expenses actually incurred in connection with directors’ duties. It does not say compensation is exempt from the conflict provision.

The protection is limited to specified grounds

Section 31D-8-860 says “void or voidable solely” because of the interest or specified participation. It does not provide blanket relief from other legal requirements. Section 31D-8-825(f) likewise says committee creation, delegation, or action alone does not establish compliance with director conduct standards. Section 31D-16-1601 requires permanent meeting and action records, in writing or a reasonably convertible form.

What trips people up

The voting provision in § 31D-8-860(a)(2) says “members entitled to vote,” and the fairness clause likewise says “members.” The section does not expressly translate that term into a shareholder electorate or specify a special quorum, vote denominator, or interested-share exclusion. Its wording should be reviewed in the context of the corporation and proposed action before relying on that route.

An interested director’s presence, participation, or vote does not alone make the transaction voidable when a statutory route is met. That director’s vote still cannot supply the disinterested approving majority.

Common questions

When does a written board consent become effective?

Section 31D-8-821(b) uses the last director’s signature unless the consent specifies a different effective date.

Can a committee fill a vacant board seat?

No. Section 31D-8-825(e)(3) withholds power to fill vacancies on the board or any committee, independently of the conflict rule.

Can a committee authorize a distribution under general delegation?

No. Section 31D-8-825(e)(1) expressly withholds that authority.

Statutes and sources

All official texts below were accessed September 4, 2026.

• W. Va. Code § 31D-8-811 — Official text: “Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors, including reasonable allowance for expenses actually incurred in connection with their duties.”

• W. Va. Code § 31D-8-821 — Official text: “(a) Unless the articles of incorporation or bylaws provide otherwise, action required or permitted by this chapter to be taken at a board of directors' meeting may be taken without a meeting if the action is taken by all members of the board. The action must be evidenced by one or more written consents describing the action taken, signed by each director and included in the minutes or filed with the corporate records reflecting the action taken. (b) Action taken under this section is effective when the last director signs the consent, unless the consent specifies a different effective date. (c) A consent signed under this section has the effect of a meeting vote and may be described as having the effect of a meeting vote in any document.”

• W. Va. Code § 31D-8-825 — Official text: “(a) Unless the articles of incorporation or bylaws provide otherwise, a board of directors may create one or more committees and appoint members of the board of directors to serve on them. Each committee must have two or more members who serve at the pleasure of the board of directors. (b) The creation of a committee and appointment of members to it must be approved by the greater of: (1) A majority of all the directors in office when the action is taken; or (2) the number of directors required by the articles of incorporation or bylaws to take action under section eight hundred twenty-four of this article. (c) Sections eight hundred twenty, eight hundred twenty-one, eight hundred twenty-two, eight hundred twenty-three and eight hundred twenty-four of this article, which govern meetings, action without meetings, notice and waiver of notice, and quorum and voting requirements of the board of directors, apply to committees and their members as well. (d) To the extent specified by the board of directors or in the articles of incorporation or bylaws, each committee may exercise the authority of the board of directors under section eight hundred one of this article. (e) A committee may not, however: (1) Authorize distributions; (2) Approve or propose to shareholders action that this chapter requires be approved by shareholders; (3) Fill vacancies on the board of directors or on any of its committees; (4) Amend articles of incorporation pursuant to section one thousand two, article ten of this chapter; (5) Adopt, amend or repeal bylaws; (6) Approve a plan of merger not requiring shareholder approval; (7) Authorize or approve reacquisition of shares, except according to a formula or method prescribed by the board of directors; or (8) Authorize or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares, except that the board of directors may authorize a committee or a senior executive officer of the corporation to authorize or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares within limits specifically prescribed by the board of directors. (f) The creation of, delegation of authority to or action by a committee does not alone constitute compliance by a director with the standards of conduct described in section eight hundred thirty of this article.”

• W. Va. Code § 31D-8-860 — Official text: “(a) No contract or transaction between a corporation and one or more of its directors or officers, or between a corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, is void or voidable solely for this reason or solely because the director or officer is present at or participates in the meeting of the board or committee thereof which authorizes the contract or transaction or solely because any director's or officer's votes are counted for the purpose, if: (1) The material facts as to the director's or officer's relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors or the committee and the board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) The material facts as to the director's or officer's relationship or interest and as to the contract or transaction are disclosed or are known to the members entitled to vote on the contract or transaction and the contract or transaction is specifically approved in good faith by vote of the members entitled to vote; or (3) The contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the board of directors, a committee of the board of directors or the members. (b) Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorizes the contract or transaction.”

• W. Va. Code § 31D-16-1601 — Official text: “(a) A corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting and a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation. (b) A corporation shall maintain appropriate accounting records. (c) A corporation or its agent shall maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each. (d) A corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.”