Board of Directors Duties

Duty of Loyalty

  • Directors must give their undivided loyalty to the organization or trust and must not let matters of personal interest or profit come into conflict with the interests of the organization or trust.

Duty of Honesty

  • Directors must act honestly at all times when dealing with or on behalf of the organization or trust.

Duty of Care

  • Directors must look after the affairs of the organization or trust with as much care, good sense and good judgment as a reasonable person would in the same circumstance.

Duty of Skill

  • Directors are not required to be experts. Directors are required to use as much skill in making decisions for the organization or trust as any similarly skilled reasonable person.

Duty of Diligence

  • Directors must be diligent about their work as directors. Directors need to attend meetings regularly, read all minutes and reports from committees, look at all the available facts including expert recommendations on issues, but then make up their own minds on decisions.

Duty of Prudence

  • Directors are expected to exercise caution and common sense on behalf of the organization or trust.