N.Y. Public Authorities Law § 2824: Role and responsibilities of board members

§ 2824. Role and responsibilities of board members. 1. Board members

of state and local authorities shall (a) execute direct oversight of the

authority's chief executive and other management in the effective and

ethical management of the authority; (b) understand, review and monitor

the implementation of fundamental financial and management controls and

operational decisions of the authority; (c) establish policies regarding

the payment of salary, compensation and reimbursements to, and establish

rules for the time and attendance of, the chief executive and

management; (d) adopt a code of ethics applicable to each officer,

director and employee that, at a minimum, includes the standards

established in section seventy-four of the public officers law; (e)

establish written policies and procedures on personnel including

policies protecting employees from retaliation for disclosing

information concerning acts of wrongdoing, misconduct, malfeasance, or

other inappropriate behavior by an employee or board member of the

authority, investments, travel, the acquisition of real property and the

disposition of real and personal property and the procurement of goods

and services; (f) adopt a defense and indemnification policy and

disclose such plan to any and all prospective board members; (g) perform

each of their duties as board members, including but not limited to

those imposed by this section, in good faith and with that degree of

diligence, care and skill which an ordinarily prudent person in like

position would use under similar circumstances, and may take into

consideration the views and policies of any elected official or body, or

other person and ultimately apply independent judgment in the best

interest of the authority, its mission and the public; (h) at the time

that each member takes and subscribes his or her oath of office, or

within sixty days after the effective date of this paragraph if the

member has already taken and subscribed his or her oath of office,

execute an acknowledgment, in the form prescribed by the authorities

budget office after consultation with the attorney general, in which the

board member acknowledges that he or she understands his or her role,

and fiduciary responsibilities as set forth in paragraph (g) of this

subdivision, and acknowledges that he or she understands his or her duty

of loyalty and care to the organization and commitment to the

authority's mission and the public interest.

2. Individuals appointed to the board of a public authority shall

participate in state approved training regarding their legal, fiduciary,

financial and ethical responsibilities as directors of an authority

within one year of appointment to a board. Board members shall

participate in such continuing training as may be required to remain

informed of best practices, regulatory and statutory changes relating to

the effective oversight of the management and financial activities of

public authorities and to adhere to the highest standards of responsible

governance.

3. No chair who is also the chief executive officer shall participate

in determining the level of compensation or reimbursement, or time and

attendance rules for the position of chief executive officer.

4. Board members of each state and local authority, or subsidiary

thereof, shall establish an audit committee to be comprised of not less

than three independent members, who shall constitute a majority on the

committee, and who shall possess the necessary skills to understand the

duties and functions of the audit committee; provided, however, that in

the event that a board has less than three independent members, the

board may appoint non-independent members to the audit committee,

provided that the independent members must constitute a majority of the

members of the audit committee. The committee shall recommend to the

board the hiring of a certified independent accounting firm for such

authority, establish the compensation to be paid to the accounting firm

and provide direct oversight of the performance of the independent audit

performed by the accounting firm hired for such purposes.

5. Notwithstanding any provision of any general, special or local law,

municipal charter or ordinance to the contrary, no board of a state or

local authority shall, directly or indirectly, including through any

subsidiary, extend or maintain credit, arrange for the extension of

credit, or renew an extension of credit, in the form of a personal loan

to or for any officer, board member or employee (or equivalent thereof)

of the authority.

6. Members of the audit committee shall be familiar with corporate

financial and accounting practices.

7. Board members of each state and local authority, or subsidiary

thereof, shall establish a governance committee to be comprised of not

less than three independent members, who shall constitute a majority on

the committee, and who shall possess the necessary skills to understand

the duties and functions of the governance committee; provided, however,

that in the event that a board has less than three independent members,

the board may appoint non-independent members to the governance

committee, provided that the independent members must constitute a

majority of the members of the governance committee. It shall be the

responsibility of the members of the governance committee to keep the

board informed of current best governance practices; to review corporate

governance trends; to recommend updates to the authority's corporate

governance principles; to advise appointing authorities on the skills

and experiences required of potential board members; to examine ethical

and conflict of interest issues; to perform board self-evaluations; and

to recommend by-laws which include rules and procedures for conduct of

board business.

8. Board members of each state and local authority, or subsidiary

thereof which issues debt, shall establish a finance committee to be

comprised of not less than three independent members, who shall

constitute a majority on the committee, and who shall possess the

necessary skills to understand the duties and functions of the

committee; provided, however, that in the event that a board has less

than three independent members, the board may appoint non-independent

members to the finance committee, provided that the independent members

must constitute a majority of the members of the finance committee. It

shall be the responsibility of the members of the finance committee to

review proposals for the issuance of debt by the authority and its

subsidiaries and make recommendations.