A director or trustee of a not-for-profit corporation can make a valuable contribution to your community. However, directors should be aware of their obligations and liabilities.

A Director must act in good faith and in the best interests of the corporation as a whole.
This obligation is key. If you represent a constituent group within the corporation, you must still act in the best interests of the corporation as a whole.

A Director must act with reasonable skill and diligence.
You must be prudent, cautious and reasonable. But if you are an expert in law, finance or accounting you will be held to a higher standard than non-expert board members.

A Director must govern and management must manage.
You must govern and direct. Hire competent staff and let them manage.

A Director must know the operations of the corporation, its charter, by-laws and operations.
You must know the corporation to govern the corporation. Ask for an orientation session about your role, the work of the corporation and the principle regulatory, financial or other issues facing the corporation.

A Director must keep the affairs of the corporation confidential.
Corporate matters may be confidential. It is better to assume that matters are confidential unless otherwise indicated.

A Director must not take advantage of their position.
You cannot do business with the corporation. If you have a conflict, leave the meeting and ask that the minutes note your absence.

A Director must hire competent staff, monitor them, and if necessary fire them.
A Director may rely on information provided by staff. But you also have an obligation to oversee and, if necessary, to fire incompetent staff.

A Director must not be remunerated.
You may be reimbursed for your out-of-pocket expenses, but generally, you will not be entitled to receive payment for your time or other services.

A Director may be indemnified and protected from liability.
Corporate by-laws may indemnify directors against law suits. Some corporations provide director and officer liability insurance. But you may still be personally liable if the corporation fails to comply with mandatory statutory obligations like failure to pay statutory payroll deductions or for breaches of labour, employment standards or environmental legislation. Get financial and operational reports from staff on compliance. If a corporation is in poor financial condition, make sure that the corporation has sufficient resources to pay outstanding liabilities.

A Director must be prepared to resign.
If the corporation appears to be acting in an improper manner, you should raise this with the board then get legal advice about your obligations and be prepared to resign.

This is not an exhaustive list. If you are invited to join the Board of a corporation, consult with the corporation’s legal advisors and your own legal advisors about your specific rights and obligations.