(a) Except as otherwise provided by the applicable gift instrument as defined in section 551 (Definitions), the governing board may delegate to its committees, officers or employees of the corporation or the fund the authority to act in place of the governing board in investment and reinvestment of institutional funds as defined in section 551 (Definitions). Each contract, if any, pursuant to which authority is so delegated shall provide that it may be terminated by the governing board at any time, without penalty, upon not more than sixty days' notice. Section 554 (Delegation of management and investment functions) shall govern external delegation.

(b) The governing board shall exercise the standard of care required by section 717 (Duty of directors and officers) in the selection of persons to whom authority is delegated or with whom contracts are made under paragraph (a) of this section and in the continuation or termination of such delegation or contracts. The governing board shall be relieved of all liability for the investment and reinvestment of institutional funds by, and for the other acts or omissions of, persons to whom authority is so delegated or with whom contracts are so made.