Due Diligence Before & After Becoming A Director

Directors owe certain duties to the corporation when they take on the role and responsibility of sitting on a board. Every director should be aware of these duties and should act in accordance with these if they wish to avoid potential liability.

1. Directors have a duty to behave in an honest and fair manner by sharing important information and preventing harm to their corporation.
2. Directors owe a duty of loyalty to the corporation and their fiduciary obligations lay first and foremost to their organizations.
3. Directors face potential liability if they do not attend meetings and fail to dissent within seven days of receiving the minutes.
4. Directors must be adequately prepared for board meetings and must be sufficiently informed of material information to make effective and accurate decisions.