March 28th, 2013 | Comments Off on Scary Example of Individual Liability for Board Members

A recent article in the Chronicle of Philanthropy demonstrated the perils of providing lax oversight in the non-profit world:

“Nonprofit board members who think they don’t face any risks if they provide lax oversight should pay close heed to the $5.5-million price tag the New York attorney general just put on inattentiveness. Every board member should understand the strong message government officials were sending about the level of diligence expected from them, especially when it comes to conflicts of interest involving top executives.

. . .

Board members were told to pay a total of $1-million of that price tag, both as a penalty for their breach of fiduciary duty and to make up for the pay they received. Even more powerful is this message: The board members were told to resign and were banned for life from serving in any fiduciary role at any New York nonprofit.”

http://philanthropy.com/article/Price-of-Board-Inaction-/136669/