Doug, taking your questions in reverse order, here is a standard format, broad answer to your question about officer liability. Since officers are members of the Board of Directors, they are liable for actions of the Board, regardless of whether or not they vote: Officers and directors of a corporation may be subject to personal liability for acts performed as an officer or director. These liabilities can be divided into two types--liabilities for which the corporation may indemnify the officer or director and those liabilities for which indemnity is not available. Examples of liabilities that are not subject to indemnity include: o Intentional breach of the duty of care to the corporation o Intentional breach of the duty of loyalty to the corporation o Misappropriation of a corporate asset for personal use o Commingling of personal and business assets o Failure to disclose a potential or actual conflict- of interest o Crimes against the Corporation Actions subject to indemnity include all actions taken in good faith on behalf of the corporation as an officer or director. Theses liabilities may include allegations of defamation, unlawful employment practices, breach of contract, unpaid wages and unpaid tax withholding. Vice Directors are not members of the Board and are not (in my view) therefore liable for acts performed as an officer or director. Query, however, whether or not a vice director, *when actually taking the chair and acting on behalf of the Director*, becomes liable for the actions of the Board taken during the period when the Vice Director is sitting. I believe that they very well might, but there is no precedent that I have been able to find on the subject since our concept of vice directors is effectively unique. I don't believe that my answer changes about Vice Director liability, based on whether or not they attend Board meetings. They don't become Board members just by sitting in the room with the Board Members. 73, Chris W3KD On Wed, Aug 27, 2014 at 3:36 PM, Doug Rehman <doug@k4ac.com> wrote:
So it appears the next question would be does specifying that Vice Directors may attend all meetings of the Board unless specifically excluded do anything to change their liability? Given that they are passive observers of the meeting I wouldn’t think so, but what do the legal minds say?
On a tangential issue, what is the liability of the Officers since they are defined as being members of the Board, can speak at meetings, but cannot vote?
73,
Doug
K4AC
*From:* arrl-odv [mailto:arrl-odv-bounces@reflector.arrl.org] *On Behalf Of *Christopher Imlay *Sent:* Wednesday, August 27, 2014 3:22 PM *To:* vze18vwgu@verizon.net *Cc:* arrl-odv *Subject:* [arrl-odv:23232] Re: EC study motions, again
Mike, let me be the first "whack-a-mole" to pop my head up on this:
The way I see this, your question is moot: Vice Directors, notwithstanding the oft-used "heartbeat away" characteristic, are, without any doubt at all, for so long as they are Vice Directors, not members of the Board of Directors. This is clear not only from Connecticut non-profit statutes but also from our own Articles and Bylaws. We can argue a lot about our very unique concept of Vice Directors and the circumstances under which they act on behalf of an absent Director, but it is not reasonable as I see it to equate the liability of a Director for an action taken by the Board with the liability of a Vice Director for actions taken by the Board of Directors of which the Vice Director is not a member.
73, Chris W3KD
On Wed, Aug 27, 2014 at 1:01 PM, <vze18vwgu@verizon.net> wrote:
A question for our esteemed and learned brothers at the bar (sadly, we have no sisters at the bar):
To what degree are corporate directors liable for the actions of a board when they were not permitted to participate in, or even listen in on, the salient deliberations?
If the answer is "in many circumstances they are", then there is a question of fundamental fairness surrounding the exclusion of vice directors from any board deliberation, since they could at any moment and without action on their part become directors.
If the answer is "generally not", then the discussion of vice director attendance is mostly relevant to pissed off vice directors.
I must confess that "business organizations" was way down on my list of favorite subjects, and I did my best to sleep through it ... My hunch is that the former answer is mostly correct, but greater minds may know otherwise.
Which way is it, folks ??
73
Mike
K1TWF
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W3KD@ARRL.ORG
-- Christopher D. Imlay Booth, Freret & Imlay, LLC 14356 Cape May Road Silver Spring, Maryland 20904-6011 (301) 384-5525 telephone (301) 384-6384 facsimile W3KD@ARRL.ORG