For a board to approve a contract with an underwriter, how must the approval be established?

The requirement for a board to approve a contract with an underwriter typically emphasizes the importance of ensuring that decisions are made impartially and without conflicts of interest. Approval by a majority of disinterested members means that only those board members who do not have a personal interest in the contract can participate in the decision-making process. This helps to safeguard the integrity of the board's decision, ensuring that it is based on the best interests of the entity rather than on personal gain.

This standard is particularly relevant in situations like corporate governance or municipal finance, where conflicts could arise. By requiring the majority of disinterested members for approval, the structure is designed to prevent biased decisions and to promote transparency and fairness in contractual agreements. Therefore, having the agreement ratified by those members who are not affected by the transaction is crucial to maintaining the trust and efficacy of the governing body.