(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; (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, 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.
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