Nonprofit Director Conflict Transaction Approval Rules in Alaska
At a glance
| Governing act and covered transactions | Alaska Nonprofit Corporation Act; ordinary board-action rule and reasonable-compensation provision (§§ 10.20.106, 10.20.136) |
|---|---|
| Interest and related-person trigger | § 10.20.136 addresses reasonable compensation to members, directors, and officers, without a general related-person conflict trigger |
| Disclosure and knowledge | §§ 10.20.106 and 10.20.136 state no transaction/interest disclosure condition |
| Board or committee approval | Ordinary board act: majority of directors present once fixed-board quorum exists; greater articles/bylaws rule controls (§ 10.20.106) |
| Member approval and vote | § 10.20.106 sets board action; § 10.20.136 permits reasonable compensation without stating a member conflict-vote substitute |
| Fairness route and time | § 10.20.136 permits reasonable compensation for services, rather than a general fairness safe harbor |
| Interested participation and quorum | Ordinary quorum is majority of directors fixed in bylaws or stated in articles; greater document quorum may apply (§ 10.20.106) |
| Burden, effect, and separate authorization | § 10.20.136 treats permitted compensation as neither dividend nor income/profit distribution; § 10.20.106 states ordinary board-action effect |
| Special coverage and later changes | Reasonable-compensation permission covers members, directors, and officers; permitted payments are not income/profit distributions (§ 10.20.136) |
Requirements one by one
Ordinary board action and compensation
Under § 10.20.106, a nonprofit board's ordinary quorum is a majority of the number of directors fixed by the bylaws, or the number stated in the articles when the bylaws do not fix it. The articles or bylaws may require a greater quorum. With a quorum present, the majority of directors present acts for the board unless those documents require a greater vote.
Section 10.20.136 separately allows a corporation to pay reasonable compensation for services rendered to members, directors, or officers. It bars dividends and distributions of income or profit to them, while saying a permitted compensation payment is not treated as such a distribution. Neither provision supplies a distinct disinterested-director vote, member conflict vote, or broad fairness-at-entry protection for a director transaction.
What trips people up
A compensation payment meeting § 10.20.136 is addressed by that section's reasonable amount for services condition. Section 10.20.106 remains the ordinary board vote; it does not by itself resolve whether an interested transaction is valid on every other ground.
Common questions
Does § 10.20.106 exclude an interested director from the quorum?
The section calculates quorum from the fixed or stated number of directors and does not state a conflict-specific exclusion.
Does the compensation section protect every director contract?
Section 10.20.136 addresses reasonable compensation for services rendered and the dividend/distribution effect of a permitted payment. It does not state a general contract safe harbor.
Statutes and sources
- Alaska Stat. § 10.20.106: nonprofit board quorum and vote. Official section, accessed 2026-10-02.
- Alaska Stat. § 10.20.136: compensation, dividends, and distributions. Official section, accessed 2026-10-02.
Source links
Every statute quoted above, linked, with the date we checked it.
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