§ 27-19.2-4 — § 27-19.2-4. Board of directors — Duties and functions of board of directors.

Rhode Island § 27-19.2-4

• Jurisdiction: Rhode Island
• Title 27: Insurance
• Ch. 27-19.2: Nonprofit Hospital and Medical Service Corporations

Text

§ 27-19.2-4. Board of directors — Duties and functions of board of directors.

(a) The board of a nonprofit hospital and/or medical service corporation and its individual members are fiduciaries and shall act at all times:

(1) In utmost good faith;

(2) In a manner reasonably believed to be in the best interest of fulfilling the corporation's mission or the mission of affiliates or subsidiaries;

(3) In a manner reflecting undivided loyalty to the furtherance of the corporation's charitable mission;

(4) At the highest standard of fiduciary care and prudence;

(5) In accordance with a conflict of interest policy adopted by the board of directors that will be consistent with guidelines recommended and published by the U.S. Internal Revenue Service for nonprofit entities; and

(6) Physicians who receive compensation from the nonprofit hospital and/or medical service corporation, for services rendered in their professional capacity, directly or indirectly, may serve on board committees that address compensation matters; provided, however, that no such physician member may participate in a vote or deliberate on matters relating to physician compensation.

(b) The proper and principal functions of the board shall include:

(1) Ensuring that the corporation effectively carries out the charitable mission for which it was incorporated under § 27-19-2;

(2) Selecting corporate management and evaluating its performance in light of the corporation's charitable purpose;

(3) Recognizing that in the event of a conversion as defined in § 27-66-4, the reserves and assets with which they are entrusted are charitable assets, and treating them with according stewardship;

(4) Establishing a system of board governance including an annual evaluation of board performance measured against the charitable purpose of the corporation; and

(5) Holding an annual public meeting with proper notice open to providers and subscribers at which comments shall be heard from the floor.

Legislative History

P.L. 2004, ch. 330, § 2; P.L. 2004, ch. 567, § 2; P.L. 2005, ch. 39, § 1; P.L. 2005, ch. 73, § 1.