Nonprofit Director Conflict Transaction Approval Rules in Virginia

At a glance

Requirements one by one

The three statutory routes

Under § 13.1-871(A), the director's interest must preclude being a disinterested director. The corporation cannot void the transaction solely for that interest if one of three conditions applies: disclosed or known material transaction and interest facts followed by board or committee action; disclosure to voting members followed by their action; or fairness to the corporation. Unlike the board route, the member route says the facts must be disclosed to the members.

Board or committee decision

Section 13.1-871(B) requires an affirmative majority of the disinterested directors on the board or committee. That majority itself supplies the quorum for action under this section, but a single director may not authorize, approve, or ratify through this route.

Voting members

Section 13.1-871(C) uses a majority of votes eligible to be counted under that subsection. Votes controlled by a director who is not disinterested cannot count for the conflict approval; a majority of eligible members, present or absent, is the quorum for that action.

What trips people up

An interested director's presence or vote does not defeat board action that otherwise meets § 13.1-871(B). For member action, § 13.1-871(C) distinguishes conflict approval from approval under other sections: the director-controlled votes excluded from the former may count in the latter. The statute's stated protection is against corporate voidability solely for the interest; it does not itself say that every other requirement for a transaction has been met.

The official § 13.1-871 page also displays text effective January 1, 2027. In subsection C, the reference to other sections of “this Act” becomes other sections of “this chapter”; the three conflict routes and vote formulas displayed there otherwise read the same.

Common questions

Is disclosure required for the fairness route?

Section 13.1-871(A)(3) lists fairness as its own alternative. The express disclosure conditions belong to the board and member routes in subdivisions A 1 and A 2.

May one disinterested director approve for the board?

No. Section 13.1-871(B) expressly says a transaction may not be authorized, approved, or ratified under this section by a single director.

Statutes and sources

• Va. Code § 13.1-871(A)-(C), effective until January 1, 2027: director interest, board, member, and fairness routes; disinterested votes and quorum. Official section text, accessed 2026-10-02.
• Va. Code § 13.1-871(C), effective January 1, 2027: the member-vote savings clause refers to other sections of “this chapter.” Official future text, accessed 2026-10-02.