Senate Study Bill 1092 



                                       SENATE FILE       
                                       BY  (PROPOSED COMMITTEE ON
                                            JUDICIARY BILL BY
                                            CHAIRPERSON KREIMAN)


    Passed Senate, Date               Passed House,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to the duties of directors of nonprofit
  2    corporations.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  4 TLSB 1074SC 82
  5 av/gg/14

PAG LIN



  1  1    Section 1.  Section 504.831, subsections 2 and 4, Code
  1  2 2007, are amended to read as follows:
  1  3    2.  The members of the board of directors or a committee of
  1  4 the board, when becoming informed in connection with their
  1  5 decision=making functions or when devoting attention to their
  1  6 oversight functions, shall discharge their duties with the
  1  7 care that a person in a like position would reasonably believe
  1  8 appropriate under similar circumstances.
  1  9    4.  In discharging board or committee duties, a director
  1 10 who does not have knowledge that makes reliance unwarranted,
  1 11 is entitled to rely on information, opinions, reports, or
  1 12 statements, including financial statements and other financial
  1 13 data, if prepared or presented by any of the persons specified
  1 14 in subsection 5.
  1 15                           EXPLANATION
  1 16    This bill relates to standards for the performance of
  1 17 certain duties by directors of nonprofit corporations.
  1 18    Code section 504.831 is amended to require directors to
  1 19 devote attention to their oversight functions with the care
  1 20 that a person in a like position would reasonably believe
  1 21 appropriate under similar circumstances.  The bill also
  1 22 authorizes directors to rely on certain information, opinions,
  1 23 reports, or statements presented to them so long as they do
  1 24 not have knowledge that makes the reliance unwarranted.
  1 25 LSB 1074SC 82
  1 26 av:rj/gg/14