Nonprofit Director Conflict Transaction Approval Rules in West Virginia
At a glance
| Governing act and covered transactions | West Virginia Nonprofit Corporation Act; director/officer contract or other-party organization with listed role or financial interest (§ 31E-8-860(a)) |
|---|---|
| Interest and related-person trigger | Director/officer is party, or director/officer/financially interested in other party organization (§ 31E-8-860(a)) |
| Disclosure and knowledge | Material relationship/interest and contract facts disclosed or known to board/committee or voting members (§ 31E-8-860(a)(1)–(2)) |
| Board or committee approval | Good-faith authorization by majority of disinterested directors, even below ordinary quorum (§ 31E-8-860(a)(1)) |
| Member approval and vote | Informed entitled members specifically approve in good faith; ordinary meeting vote favorable > opposing unless articles require more (§§ 31E-8-860(a)(2), 31E-7-724(d)) |
| Fairness route and time | Fair to corporation when board, committee, or members authorize, approve, or ratify (§ 31E-8-860(a)(3)) |
| Interested participation and quorum | Listed interest/presence/participation/counted vote alone does not void; interested directors count toward board/committee meeting quorum (§ 31E-8-860(a)–(b)) |
| Burden, effect, and separate authorization | Not void or voidable solely for listed grounds; § 31E-7-724 governs ordinary member action (§§ 31E-8-860(a), 31E-7-724(d)) |
| Special coverage and later changes | Section expressly covers officers as well as directors (§ 31E-8-860(a)) |
Requirements one by one
Covered relationships
Section 31E-8-860(a) reaches a direct contract with a director or officer and a contract with another organization where one serves as a director or officer or has a financial interest. Its protection is limited to voidness or voidability solely for the listed relationship, presence, participation, or counted-vote grounds.
Approval and fairness
For the board or committee route, § 31E-8-860(a)(1) requires material facts about the relationship and contract to be disclosed or known, then good-faith authorization by a majority of disinterested directors. That majority can be fewer than the ordinary quorum. Subsection (a)(2) allows specifically approved, good-faith action by informed members entitled to vote. Alternatively, subsection (a)(3) tests fairness when the board, committee, or members authorize, approve, or ratify the deal.
What trips people up
Under § 31E-8-860(b), interested directors may count toward a meeting quorum. For the member route, § 31E-7-724(a) and § 31E-7-724(d) supply the ordinary meeting quorum and vote rule unless the chapter, articles, or bylaws vary it: entitled members present constitute a quorum, and favorable votes must exceed opposing votes unless the articles require more. Section 31E-8-860(a)(2) itself calls for a good-faith, specific vote by members entitled to vote; it does not create a separate disinterested-member tally.
Common questions
Does the statute cover an officer who is not a director?
Yes. Section 31E-8-860(a) expressly names officers alongside directors in the covered relationship and participation grounds.
Is fairness measured only when the contract is signed?
Section 31E-8-860(a)(3) instead asks whether it is fair to the corporation when authorized, approved, or ratified by the listed body.
Statutes and sources
- W. Va. Code § 31E-8-860(a)–(b): interested transactions, approval, fairness, and quorum. Official section, accessed 2026-10-02.
- W. Va. Code § 31E-7-724(a), (d): ordinary member meeting quorum and voting. Official section, accessed 2026-10-02.
Source links
Every statute quoted above, linked, with the date we checked it.
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