Whether a fortune 500 company, a not-for-profit housing association, charity, society, co-op, or strata council, the board of directors is the foundation of any organization’s governance. There is no legal or practical difference between a handsomely compensated director of a for-profit venture and a volunteer director for a local charitable organization. The same duties, standards, and obligations apply to any director of any corporate entity. So, when you volunteer for a board of directors, you run the risk of being personally liable if you and your fellow directors fail to meet the standard of care required of all boards of directors.
The following 10-point standard of care checklist will give you an idea of how you and your board must conduct yourselves in order to avoid personal liability. As the director of an organization you should, at the very least:
This checklist alone will not shield you from personal liability, but will point you and your fellow directors in the right direction. Stevens Virgin can provide you with a “legal liability checkup” by reviewing your board’s practices and processes to ensure you are meeting the standard of care, and avoiding liability.