Rhode Island General Laws 7-6-22. Board of directors
(a) The affairs of a corporation are managed by a board of directors. Directors need not be residents of this state or members of the corporation unless the articles of incorporation or the bylaws requires it. The articles of incorporation or the bylaws may prescribe other qualifications for directors.
Terms Used In Rhode Island General Laws 7-6-22
- Articles of incorporation: means the original or restated articles of incorporation or articles of consolidation and all amendments to it, including articles of merger and special acts of the general assembly creating corporations and/or entities. See Rhode Island General Laws 7-6-2
- Board of directors: means the group of persons vested with the management of the affairs of the corporation (including, without being limited to, a board of trustees) regardless of the name by which the group is designated. See Rhode Island General Laws 7-6-2
- Bylaws: means the code or codes of rules adopted for the regulation or management of the affairs of the corporation regardless of the name, or names, by which the rules are designated. See Rhode Island General Laws 7-6-2
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Director: means a member of a board of directors. See Rhode Island General Laws 7-6-2
- Member: means one having membership rights in a corporation in accordance with the provisions of its articles of incorporation or bylaws regardless of the name by which the person is designated. See Rhode Island General Laws 7-6-2
- person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
(b) A director shall discharge his or her duties as a director, including his or her duties as a member of a committee:
(1) In good faith;
(2) With the care an ordinarily prudent person in a similar position would exercise 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.
History of Section.
P.L. 1984, ch. 380, § 1; P.L. 1984, ch. 444, § 1; P.L. 1987, ch. 472, § 1.