Corporations, Associations, and Partnerships
Rhode Island Business Corporation Act
Directors and Officers
§ 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
(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
(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
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.)