• December 2019
    M T W T F S S
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Is it possible to get members on the Board to sign non-disclosure or non-compete agreements in the event that they have an ulterior motive?

As Dana pointed out, having board members sign a confidentiality agreement would be redundant because they already owe a fiduciary duty. This fiduciary duty can be broken down into a duty of loyalty and a duty of care.

A duty of loyalty requires board members to put the corporation’s interests ahead of their personal interests. If you feel that a board member violated this duty by sharing confidential information then the burden is on the accused board member to prove s/he did not breach the duty of loyalty (must allege good faith, fairness, and honesty).

On the other hand, the duty of care demands for board members to act as a reasonably prudent person would under similar circumstances; aka act carefully in carrying out their responsibilities. Unlike the duty of loyalty, the person claiming the breach of duty has the burden of proof. Although board members are routinely indemnified for breaching a duty of care, it won’t protect them when they act in bath faith or personally gain from their conduct.

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