31A-5-412 - Committees of directors. - Utah Statutes

31A-5-412. Committees of directors.
(1) (a) If provided for in the articles or bylaws of a corporation, the board, by resolutionadopted by a majority of the full board, may designate one or more committees.
(b) A committee designated under this Subsection (1) shall consist of three or moredirectors serving at the pleasure of the board.
(c) The board may designate one or more directors as alternate members of a committeeto substitute for an absent member at any meeting of the committee.
(d) The designation of a committee and delegation of authority to the committee does notrelieve the board or a director of responsibility imposed by law upon the board or director.
(2) (a) (i) Except for a corporation described under Subsection 31A-5-407(4), acorporation shall have an audit committee.
(ii) A corporation's entire board constitutes the audit committee if the corporation:
(A) is described under Subsection 31A-5-407(4); and
(B) does not have an audit committee that complies with this Subsection (2).
(b) If a corporation is required to have an audit committee under Subsection (2)(a), amember of the audit committee may not be an inside director as defined under Subsection31A-5-407(3).
(c) An audit committee shall maintain an overview of the audit activities, systems, andstaff of the company and of the activities of the outside auditors, in order to advise the board onthe adequacy of fiscal control.
(d) A corporation shall give an audit committee direct and private access to companydata and personnel as that committee considers necessary.
(e) An audit committee may meet privately with the outside directors as the auditcommittee sees fit.
(f) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, thecommissioner may make rules pertaining to audit committee requirements similar to thoseoutlined in the Annual Financial Reporting Model Regulation of the National Association ofInsurance Commissioners.
(3) (a) When the board is not in session, a committee may exercise the powers of theboard in the management of the business and affairs of the corporation to the extent authorized inthe resolution or in the articles or bylaws, except action regarding:
(i) compensation or indemnification of a person who is:
(A) a director;
(B) a principal officer; or
(C) one of the three most highly paid employees;
(ii) benefits or payments requiring shareholder or policyholder approval;
(iii) approval of a contract requiring board approval under Section 31A-5-414;
(iv) approval of a transaction in which a director has a material interest adverse to thecorporation;
(v) amendment of the articles or bylaws;
(vi) merger or consolidation under Section 31A-5-501, 31A-5-502, or 31A-5-503;
(vii) conversion under Section 31A-5-505, 31A-5-506, 31A-5-507, or 31A-5-509;
(viii) voluntary dissolution under Section 31A-5-504;
(ix) transfer of business or assets under Section 31A-5-508;
(x) any other decision requiring shareholder or policyholder approval;

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(xi) amendment or repeal of an action taken by the full board, which by its terms is notsubject to amendment or repeal by a committee;
(xii) dividends or other distributions to shareholders, policyholders, or voting membersother than in the routine implementation of a policy determination of the full board;
(xiii) selection of a principal officer; and
(xiv) filling a vacancy on the board or on a committee created under Subsection (1),except that the articles or bylaws may provide for a temporary appointment to fill a vacancy onthe board or a committee.
(b) A temporary appointment provided for in Subsection (3)(a)(xiv) may last only untilthe end of the next board meeting.
(4) The full board shall review a transaction in which an officer has a material financialinterest adverse to the corporation at the next board meeting after the transaction.

Amended by Chapter 349, 2009 General Session