2005 California Corporations Code Sections 5240-5241 Article 4. Investments

5240.  (a) This section applies to all assets held by the
corporation for investment.  Assets which are directly related to the
corporation's public or charitable programs are not subject to this
section.
   (b) Except as provided in subdivision (c), in investing,
reinvesting, purchasing, acquiring, exchanging, selling and managing
the corporation's investments, the board shall do the following:
   (1) Avoid speculation, looking instead to the permanent
disposition of the funds, considering the probable income, as well as
the probable safety of the corporation's capital.
   (2) Comply with additional standards, if any, imposed by the
articles, bylaws or express terms of an instrument or agreement
pursuant to which the assets were contributed to the corporation.
   (c) No investment violates this section where it conforms to
provisions authorizing the investment contained in an instrument or
agreement pursuant to which the assets were contributed to the
corporation.  No investment violates this section or Section 5231
where it conforms to provisions requiring the investment contained in
an instrument or agreement pursuant to which the assets were
contributed to the corporation.
   (d) In carrying out duties under this section, each director shall
act as required by subdivision (a) of Section 5231, may rely upon
others as permitted by subdivision (b) of Section 5231, and shall
have the benefit of subdivision (c) of Section 5231, and the board
may delegate its investment powers as permitted by Section 5210.
   (e) Nothing in this section shall be construed to preclude the
application of  the Uniform Management of Institutional Funds Act,
Part 7 (commencing with Section 18500) of Division 9 of the Probate
Code, if that act would otherwise be applicable, but nothing in the
Uniform Management of Institutional Funds Act alters the status of
governing boards, or the duties and liabilities of directors, under
this part.
5241.  Nothing in Section 5240 shall abrogate or restrict the power
of the appropriate court in proper cases to direct or permit a
corporation to deviate from the terms of a trust or agreement
regarding the making or retention of investments.  Notice of such
action or proceeding shall be given to the Attorney General who may
intervene.