POTENTIAL BOARD MEMBERS
WITH SOUND LIABILITY PRACTICES
BY MARK ENGLE, CAE, AND JED MANDEL
THERE IS NO SHORTAGE OF ADVICE
THESE DAYS ON WHAT MEMBERS
OF AN ASSOCIATION BOARD OF
DIRECTORS SHOULD DO TO FULFILL
THEIR FIDUCIARY DUTIES AND,
THUS, MINIMIZE THE RISK OF ANY
POTENTIAL PERSONAL LIABILITY
ASSOCIATED WITH THEIR SERVICE
ON THE BOARD.
T
hat focus, and paying atten-
tion to meeting fiduciary
responsibilities, is incredi-
bly important. Indeed,
recruiting the best and
brightest among your mem-
bers to serve on the board
requires that they be reasonably assured
they have a means to avoid exposing
themselves to personal risk. The key to
22 FORUM JANUARY 2009
that is for them to understand they have
fiduciary duties, that those duties are
relatively easy to fulfill, and that by fulfilling them they substantially minimize
their risk of liability.
Further, in Illinois and many other
states, there are state laws that statutorily limit the liability of directors (
provided they have not acted willfully or
wantonly). These limited liability provi-
sions often require that directors not be
paid (or be paid less than a certain
amount) in order for them to qualify for
the limited liability protection. It is
important that organizations determine
the extent of any state statutory limited
liability protection, and do their best to
assure that their directors understand
the criteria that allow them to be eligible
for such protection.
