Sometimes directors are paid for their time, sometimes not, but either case you should know that with the responsibility, you also have some obligations to live up to. Fail to live up to the obligations, and you could find yourself the subject of a lawsuit.
First, some background: if you’ve viewed the free “Board of Directors’ Essential Toolkit” law video series, you know that a corporation is owned by shareholders. All major decisions must be voted on by shareholders.
To manage routine affairs, the shareholders vote in a board of directors, as specified in the documents of incorporation, submitted when the company was incorporated. The board of directors meets regularly, and votes among themselves for officers of the board: president, vice president, secretary etc.
All the Directors and Officers have an “fiduciary” duty to the shareholders, to act in the best interests of the corporation. Fiduciary means they put the company’s interest above their own. More later . .. .
