Bill Summary: A10365

• Replaces the term "key employee" with "key person" throughout not-for-profit corporation and trust law to broaden the definition beyond employees to include any person exercising substantial influence over the organization.

• Modifies "independent director" and "independent trustee" standards by lowering financial thresholds for related-party transactions based on entity size: $10,000 for entities under $500,000 revenue, $25,000 for entities $500,000-$10 million, and $100,000 for entities over $10 million.

• Clarifies that related-party transaction exceptions include de minimis transactions, standard services available on equal terms to the public, and benefits available to all similarly situated beneficiaries in the same class.

• Strengthens board governance by requiring the board to oversee conflict of interest and whistleblower policies; removes requirement that whistleblower matters be reported only to audit committees; and prevents employee-directors from voting on whistleblower complaints.

• Creates affirmative defenses for related-party transactions when ratified by the board prior to attorney general inquiry, with documentation of ratification basis and future compliance procedures in place.