California Corporations Code Section 22003 effectively deems directors to be all-knowing:
For the purposes of this part every director of a joint stock association is deemed to possess such knowledge of the affairs of his association as to enable him to determine whether any act, proceeding, or omission of its directors is a violation of this part.
Notably, deemed directorial omniscience is limited to "this part", which is Part 3 of Title 3 of the California Corporations Code. Title 3 concerns unincorporated associations and Part 3 is entitled "Joint Stock Associations". For purposes of Title 3, a "director" is "a natural person serving as a member of the board or other governing body of the unincorporated association". Cal. Corp. Code § 18003. Thus, the directors referenced in Section 22003 are not directors of corporations.
This leaves the question of just what is a "joint stock association"? The Corporations Code doesn't say. In my four decades of practice, I have yet to encounter joint stock association identified as such. However, I was able to find this century old explanation:
At common law, however, a joint stock association was a group of individuals organized for certain purposes into an association similar to a partnership, but, unlike a partnership, having a capital stock divided into shares transferable by the owner. Partners, the courts held, might associate themselves in a joint stock company with transferable shares. A joint stock association in the early days was really simply a large partnership possessing some of the characteristics and powers of the private corporation.
I. Maurice Wormser, The Legal Status of Joint Stock Associations, 3 Fordham L. Rev. 1 (1916) (footnotes omitted).
Part 3, Title 3 of the Corporations Code consists of only 4 statutes, including Section 22003. The other three impose criminal penalties. It appears that all of these statutes have fallen into desuetude. I could find no reported decisions applying any of these statutes (I did find a handful of statutes dating to the early twentieth century citing predecessor statutes).
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