Organizations everywhere have come to realize attorneys can be key a resource in the boardroom. Afterall, the purpose of a board is to act in the best interest of and protect the organization they serve, which could include legal counsel. In the non-profit sector, absent an owner or CEO, the board is tasked with most if not all the major decisions making an attorney an obvious choice for directorship.
However beneficial an attorney’s board service may be, a seat on a board of directors could open up a myriad of liability concerns for the individual lawyer in question. When being approached to serve on a non-profit board, attorneys should pose a few questions.
What does the role entail?
Before agreeing to serve on a board of directors, attorneys should discuss the expectations of their position. One reason is to avoid the blurred lines of service and pro-bono legal advice. While an attorney board member will likely be asked to consult beyond their prowess, they should maintain boundaries based on their defined role to avoid sticky situations such as giving advice outside of their expertise.
How long is the term?
Attorneys should also have a clear understanding of the time commitment associated with their service. For example, is the board seat limited to a one, two or three year term? Also, will meetings be held monthly, quarterly or annually? Trouble could arise if an attorney is unable to attend meetings or fulfill primary board responsibilities.
Is the organization insured?
Attorneys need to make sure the non-profit they are choosing to serve is equipped with a directors & officers liability insurance (D&O) policy to protect board members. D&O coverage can assist with claims such as overstepping the non-profits bylaw authority or misallocating donations, as well as financially reimburse any board member for defense costs in the event of a lawsuit. Along with verifying there is a D&O policy in place, attorneys should inquire about the organizations indemnification policy to confirm they are reputationally and financially protected.
Additional conversations to explore prior to accepting a non-profit board position include financial obligations and board policies that could impact an attorney’s service and practices.
Attorney’s considering a non-profit board position must remember the essence of their role should be to advise and lead in the best interest of the organization. This may sometimes mean referring the organization to a more qualified, or less professionally conflicted legal peer to fulfill a need.
So, while it is an honor to be asked to join a non-profit organizations board, attorneys should remain proactive to safeguard their practices, reputations and assets. Before accepting an offer of a board of directors appointment, attorneys would do well to ask a few important questions to ensure they can properly serve the organization and their community as best possible.