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Board
members can minimize their risk of personal liability by doing the
following:
Keep
an eye on organizational documents. The board should look over legal
and financial documents and analyses prepared by staff members,
outside auditors, and independent counsel.
Obtain
and carefully review both audited and unaudited periodic financial
reports of the organization.
Review
from time to time all articles of incorporation, bylaws, and other
governing documents.
Become
actively involved in deliberations during board meetings. Comment
as appropriate and ask questions where prudent. If you do not feel
right about an action the board is taking, request that your dissent
be recorded in the meeting minutes. Make decisions deliberately
and without undue haste or pressure.
Keep
written records of board preparation and deliberation. That way,
if the need arises, these written records should be able to prove
due diligence.
Request
the assistance of an expert when appropriate. Hire independent accountants
to assess and evaluate any matter that has significant financial
ramifications. Request that legal opinion be obtained on any matter
that has unclear legal ramifications.
Remain
an active and open board member. Attend the organization's meetings,
read the organization's publications, and keep fully apprised of
important policies and activities.
Acknowledge
potential conflicts of interest, disclose them to the board, and
withdraw from making decisions when a potential conflict is involved.
©
National Center for Nonprofit Boards
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