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This entry was published on 2019-11-15
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Duty of directors, officers and key persons
Not-for-Profit Corporation (NPC) CHAPTER 35, ARTICLE 7
§ 717. Duty of directors, officers and key persons.

(a) Directors, officers and key persons shall discharge the duties of
their respective positions in good faith and with the care an ordinarily
prudent person in a like position would exercise under similar
circumstances. The factors set forth in subparagraph one of paragraph
(e) of section 552 (Standard of conduct in managing and investing an
institutional fund), if relevant, must be considered by a governing
board delegating investment management of institutional funds pursuant
to section 514 (Delegation of investment management) For purposes of
this paragraph, the term institutional fund is defined in section 551

(b) In discharging their duties, directors, officers and key persons,
when acting in good faith, may rely on information, opinions, reports or
statements including financial statements and other financial data, in
each case prepared or presented by: (1) one or more officers or
employees of the corporation, whom the director believes to be reliable
and competent in the matters presented, (2) counsel, public accountants
or other persons as to matters which the directors, officers or key
persons believe to be within such person's professional or expert
competence or (3) a committee of the board upon which they do not serve,
duly designated in accordance with a provision of the certificate of
incorporation or the bylaws, as to matters within its designated
authority, which committee the directors, officers or key persons
believe to merit confidence, so long as in so relying they shall be
acting in good faith and with that degree of care specified in paragraph
(a) of this section. Persons shall not be considered to be acting in
good faith if they have knowledge concerning the matter in question that
would cause such reliance to be unwarranted. Persons who so perform
their duties shall have no liability by reason of being or having been
directors, officers or key persons of the corporation.