N.Y. Not-for-Profit Corporation Law § 554: Delegation of management and investment functions

§ 554. Delegation of management and investment functions.

(a) Subject to any specific limitation set forth in a gift instrument

or in law other than this article, an institution may delegate to an

external agent the management and investment of an institutional fund to

the extent that an institution could prudently delegate under the

circumstances. An institution shall act in good faith, with the care

that an ordinarily prudent person in a like position would exercise

under similar circumstances as required by section seven hundred

seventeen of this chapter, in:

(1) selecting, continuing or terminating an agent, including assessing

the agent's independence including any conflicts of interest such agent

has or may have;

(2) establishing the scope and terms of the delegation, including the

payment of compensation, consistent with the purposes of the institution

and the institutional fund; and

(3) monitoring the agent's performance and compliance with the scope

and terms of the delegation.

(b) In performing a delegated function, an agent owes a duty to the

institution to exercise reasonable care, skill and caution to comply

with the scope and terms of the delegation.

(c) An institution that complies with paragraph (a) of this section is

not liable for the decisions or actions of an agent to which the

function was delegated.

(d) By accepting delegation of a management or investment function

from an institution that is subject to the laws of this state, an agent

submits to the jurisdiction of the courts of this state in all

proceedings arising from or related to the delegation or the performance

of the delegated function.

(e) Each contract, if any, pursuant to which authority is so delegated

shall provide that it may be terminated by the institution at any time,

without penalty, upon not more than sixty days notice.

(f) An institution may delegate management and investment functions to

its committees, officers, or employees as authorized by the laws of this

state other than this article, as set forth in, inter alia, section 514

(Delegation of investment management).

(g) Nothing in this article shall impair the operation of section 717

(Duty of directors and officers).