Common use of Reserved Powers Clause in Contracts

Reserved Powers. Notwithstanding the Hospitals’ intent that each Board shall continue to govern the provision of healthcare services at each Hospital and, subject to the limitations of Sections 2.5, 3.7 and 3.8 of this Agreement, in order to achieve the benefits and mutual goals of the System, the exercise of the following powers by the CMC, HH and MCH Boards shall be subject to the approval of the System Parent (the “Reserved Powers”). The Hospitals recognize that neither MCH nor HH is subject to the teachings of the Catholic Church or the ERDs. Therefore, in exercising its Reserved Powers, the System Parent may not decline to authorize or approve any action by either MCH or HH that is subject to the System Parent’s authority for the sole purpose of restricting other activities of MCH or HH that are outside of the System Parent’s authority because they are in conflict with the teachings of the Catholic Church or the ERDs. If MCH or HH questions whether the System Parent denial or disapproval of a proposed action of MCH or HH subject to the Reserved Powers violates the foregoing prohibition, then the System Parent shall provide a written explanation of the reasons for the decision to demonstrate that it is in the best interests of the System without regard to compliance with the teachings of the Catholic Church or the ERDs in areas outside of the System Parent’s authority. The Reserved Powers cannot be exercised in a manner that prevents the HH or MCH or CMC Boards from fulfilling their fiduciary duties.