TITLE 7

Corporations, Associations, and Partnerships

CHAPTER 7-1.2

Rhode Island Business Corporation Act

PART 7-1.2-801

Directors and Officers

SECTION 7-1.2-801



   § 7-1.2-801  Board of directors. –

(a) Except as may be otherwise provided in this chapter or in the articles of

incorporation, the business and affairs of a corporation are managed by a board

of directors. Directors need not be residents of this state or shareholders of

the corporation unless the articles of incorporation or bylaws require it. The

articles of incorporation or bylaws may prescribe other qualifications for

directors. The board of directors has authority to fix the compensation of

directors unless otherwise provided in the articles of incorporation.



   (b) A director shall discharge his duties as a director,

including his duties as a member of a committee:



   (1) In good faith;



   (2) With the care that a person in a like position would

reasonably believe appropriate under similar circumstances; and



   (3) In a manner he or she reasonably believes to be in the

best interests of the corporation.



   (c) In discharging his or her duties, a director is entitled

to rely on information, opinions, reports, or statements, including financial

statements and other financial data, if prepared or presented by:



   (1) One or more officers or employees of the corporation whom

the director reasonably believes to be reliable and competent in the matters

presented;



   (2) Legal counsel, public accountants, or other persons as to

matters the director reasonably believes are within the person's professional

or expert competence; or



   (3) A committee of the board of directors of which he or she

is not a member if the director reasonably believes the committee merits

confidence.



   (d) A director is not acting in good faith if he or she has

knowledge concerning the matter in question that makes reliance otherwise

permitted by subsection (c) unwarranted.



   (e) A director is not liable for any action taken as a

director, or any failure to take any action, if he or she performed the duties

of his or her office in compliance with this section.



   (f) For the purposes of subsections (b) through (e),

"corporation" also includes any financial institution, insurance company,

public utility or other quasi-public corporation having purposes enumerated as

exceptions to this chapter in § 7-1.2-301 and the provisions of

subsections (b) through (e) of this section are applicable to the directors of

that corporation.



History of Section.

(P.L. 2004, ch. 216, § 2; P.L. 2004, ch. 274, § 2; P.L. 2005, ch.

120, § 1; P.L. 2005, ch. 130, § 1.)