Title 7
Corporations, Associations, and Partnerships
Chapter 1.2
Rhode Island Business Corporation Act
Part 8
Directors and Officers
R.I. Gen. Laws § 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.