§ 27-19.2-4. Board of directors - Duties and functions of the 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 of this title;

(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(3), 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.

History of Section. (P.L. 2004, ch. 330, § 2; P.L. 2004, ch. 567, § 2; P.L. 2005, ch. 39, § 1; P.L. 2005, ch. 73, § 1.)