- Good Faith – has been covered a number of times. Acting in the best interest of the collective.
- With Care – this is the one that is fairly subjective and where a Board is susceptible to claims of negligence or ill-intent. Boards must always use their resources, illustrating careful thought and having researched information as contributing factors to a decision. Some examples illustrating this would include: reviewing a Management Report prior to a meeting; asking for an attorney to review a detailed or complex contract/agreement prior to executing; utilizing an engineer for an in-depth study of a complex structural problem and gathering formal recommendations; engaging with an accountant to do an annual audit of the financials; speaking directly to an insurance agent before binding coverage. Engaging with experts and showing due diligence is always a good way to prove “duty of care” was taken
- Best Interest – if meeting minutes reflect these steps were taken, and if the discussion and decisions happened in a recognized open meeting of the Board, the Board is acting in a reasonable manner and in the best interest of the association.
As volunteers of a non-profit corporation, it is sometimes hard to recognize and accept there is a significant amount of liability put on the Board. If Fiduciary Duty is understood and followed, and Directors & Officers insurance is put in place, the Board should be comforted in the protections afforded under the Business Judgement Rule doctrine.