27:25-4.1 Duties of board of directors.

2. a. The board of directors of the corporation shall:

(1) Execute oversight of the corporation's executive director and other management in the effective and ethical management of the corporation, including review and approval of any fare changes and the elimination or substantial curtailment of motorbus regular route service, rail passenger service, or light rail service;

(2) Understand, review, and monitor the implementation of fundamental financial and management controls and operational decisions of the corporation, including review and approval of any fare changes and the elimination or substantial curtailment of motorbus regular route service, rail passenger service, or light rail service;

(3) Establish policies regarding the payment of salary, compensation, and reimbursements to, and establish rules for the time and attendance of, the executive director and management, provided that nothing in P.L.2018, c.162 (C.27:25-4.1 et al.) shall be construed to apply civil service rules and regulations to the corporation;

(4) Adopt a code of ethics, in consultation with the chief ethics officer, applicable to each board member, officer, and employee that, at a minimum, includes the applicable standards established by State law;

(5) Require that the corporation establish written policies and procedures on personnel including policies protecting employees from retaliation for disclosing information concerning acts of wrongdoing, misconduct, malfeasance, or other inappropriate behavior by an employee of the corporation;

(6) Adopt a policy that provides guidelines for when it is appropriate for the chief ethics officer to forward the results and findings of a preliminary investigation conducted by the chief ethics officer to the State Ethics Commission, Office of the Attorney General, county prosecutor's office, or any other appropriate agency for further investigation or action;

(7) Adopt a defense and indemnification policy and disclose such policy to any and all prospective board members; and

(8) Adopt corporate bylaws, which shall be reviewed and updated at least once every five years.

b. (1) The members of the board shall perform each of their duties as board members, including but not limited to those imposed by this section, in good faith and with that degree of diligence, care, and skill which an ordinarily prudent person in like position would use under similar circumstances, and may take into consideration the views and policies of any elected official or body, or other person and ultimately apply independent judgment in the best interest of the corporation, its mission, and the public.

(2) At the time that a board member takes and subscribes the board member's oath of office, or within 60 days after the effective date of P.L.2018, c.162 (C.27:25-4.1 et al.) if the board member has already taken and subscribed the board member's oath of office, the board member shall execute an acknowledgement, in a form developed by the corporation, in which the board member shall, at a minimum:

(a) acknowledge that the board member understands that a board member has an obligation to perform duties and responsibilities to the best of the board member's abilities, in good faith and with proper diligence and care, consistent with the enabling compact, mission, and by-laws of the corporation and the applicable laws of this State; and that the duty to the corporation is derived from and governed by its mission;

(b) acknowledge that the board member understands the board member's duty of loyalty and care to the corporation and commitment to the corporation's mission and the public interest; and the board member's obligation to act in the best interests of the corporation and the people whom the corporation serves;

(c) agree that a board member has an obligation to become knowledgeable about the mission, purpose, functions, responsibilities, and statutory duties of the corporation and, when necessary, to make reasonable inquiry of management and others with knowledge and expertise so as to inform the board member's decisions;

(d) agree to exercise independent judgment on all matters before the board;

(e) agree not to divulge confidential discussions and confidential matters that come before the board for consideration or action;

(f) agree to disclose to the board and the chief ethics officer any conflicts, or the appearance of a conflict, of a personal, financial, ethical, or professional nature that could inhibit the board member from performing the board member's duties in good faith and with due diligence and care; and

(g) certify that the board member does not have any interest in, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity or incur any obligation of any nature, which is in substantial conflict with the proper discharge of the board member's duties in the public interest.

c. Individuals appointed to the board of directors shall participate in training regarding their legal, financial, and ethical responsibilities as directors of the corporation within six months of appointment to the board. Board members shall participate in continuing training as may be required to remain informed of best practices and regulatory, legal, financial, and ethical responsibilities and standards.

d. No board member, including the chairperson, shall serve as the corporation's executive director, chief financial officer, or hold any senior management position while serving as a member of the board.

e. (1) The board of directors shall establish an audit committee, to be comprised of not less than three members, who shall possess the necessary skills to understand the duties and functions of the committee, including having sufficient knowledge in the areas of finance and accounting. The audit committee shall meet on at least a quarterly basis.

(2) The audit committee shall review and monitor: the reliability of financial statements and the adequacy of financial controls; the results of any audit; and compliance with legal, regulatory, and ethical requirements. The audit committee shall have responsibility for supervising and reviewing the work of the internal audit department, which has responsibility for investigating fraud, waste and abuse within and affecting the agency.

f. (1) The board of directors shall establish an administration committee to be comprised of not less than three independent members, who shall possess the necessary skills to understand the duties and functions of the committee; provided, however, that in the event that a board has less than three independent members, the board may appoint non-independent members to the committee, provided that the independent members shall constitute a majority of the members of the committee. The administration committee shall meet on at least a quarterly basis.

(2) The administration committee shall: advise the board of directors on financial matters, including, but not limited to, proposed budgets including the capital program, major expenditures of the corporation, and all financial policies; receive a bi-monthly report from the head of the Office of Equal Opportunity and Affirmative Action, or any successor office, which shall also be provided to the executive director, regarding the activities of that office, including a summary of the nature and number of the complaints involving discrimination or harassment received by that office and any actions taken by that office in response to those complaints; receive a bi-monthly report from the director of the Human Resources Office, or any successor office, which shall also be provided to the executive director, regarding the activities of that office, including a summary of job vacancies, job postings, new employees, reclassification of job titles, retirements, terminations, disciplinary actions, and any other personnel decisions; and meet at least annually with representatives of the labor organizations representing employees of the corporation. Reports shall not include any personally identifiable information or personnel information protected under state or federal law.

g. (1) The board of directors shall establish an operations and customer service committee, to be comprised of not less than three independent members, who shall possess the necessary skills to understand the duties and functions of the committee. The operations and customer service committee shall meet at least on a quarterly basis.

(2) The operations and customer service committee shall: advise the board of directors on day to day operations and maintenance; review vital statistics including on time performance, cost of service, and service rationalization; review the corporation's service plan and service standards; oversee fleet management plans, strategic planning, and the corporation's business plan; and oversee the corporation's customer service plan and statistics.

h. (1) The board of directors shall establish a capital planning and privatization committee, to be comprised of not less than three independent members, who shall possess the necessary skills to understand the duties and functions of the committee. The capital planning and privatization committee shall meet on at least a quarterly basis.

(2) The capital planning and privatization committee shall: review and monitor the status of capital projects including the annual element of the corporation's five year capital program; review the rationale for the capital program, its budgets and schedule, and address fast tracking key projects; oversee the development of fare policy and technology; and review real estate transactions and route and service issues that affect private carriers or other properties with which the corporation does business.

i. For the purposes of this section, an "independent member" is one who:

(1) is not, and in the past two years has not been, employed by the corporation or an affiliate in an executive capacity;

(2) is not, and in the past two years has not been, employed by an entity that received remuneration valued at more than $15,000 for goods and services provided to the corporation or received any other form of financial assistance valued at more than $15,000 from the corporation;

(3) is not a relative of an executive officer or employee in an executive position of the corporation or an affiliate; and

(4) is not, and in the past two years has not been, a lobbyist registered under a state or local law and paid by a client to influence the management decisions, contract awards, rate determinations, or any other similar actions of the corporation or an affiliate.

j. Notwithstanding the provisions of any other law to the contrary, the board shall not directly or indirectly, including through any subsidiary, extend or maintain credit, arrange for the extension of credit, or renew an extension of credit, in the form of a personal loan to or for any officer, board member, or employee, or equivalent thereof, of the corporation.

L.2018, c.162, s.2.