When you join a board of directors, you have a responsibility to participate in decision-making, governance, and management. Being a board member comes with a lot of responsibility, so it`s important to have a board member agreement in place that outlines your responsibilities and expectations.
A board member agreement is a legal agreement between a company or organization and its board members. It sets out the expectations and responsibilities of the board members, including their fiduciary duties, obligations to the organization, and their role in decision-making processes.
To help you get started, we’ve put together a sample board member agreement that you can use to create your own agreement.
SAMPLE BOARD MEMBER AGREEMENT
This Board Member Agreement (the “Agreement”) is entered into by and between [Company/Organization Name] (the “Organization”) and [Board Member Name] (the “Board Member”).
1. Purpose
The purpose of this Agreement is to clarify the expectations and responsibilities of the Board Member in connection with their serving as a member of the Board of Directors (the “Board”) of the Organization.
2. Term
This Agreement shall remain in effect for the duration of the Board Member’s term on the Board unless earlier terminated by the Board Member or the Organization.
3. Duties of the Board Member
The Board Member agrees to fulfill the following duties:
a. Attend all Board meetings, unless excused by the Board Chair or the President/CEO.
b. Prepare for all Board meetings by reviewing all materials provided in advance.
c. Act in the best interests of the Organization at all times.
d. Perform all duties in compliance with all applicable laws and regulations.
e. Protect the Organization`s financial assets.
f. Ensure the Organization`s financial statements are accurate and complete.
g. Participate in discussions and decision-making processes in a reasonable and constructive manner.
h. Promote the Organization`s mission and values.
4. Fiduciary Duty
The Board Member acknowledges and agrees that they owe a fiduciary duty to the Organization. This means that the Board Member must act in good faith and in the best interests of the Organization, not in their own personal interest or in the interest of any other organization or individual.
5. Confidentiality
The Board Member agrees to maintain confidentiality with respect to all confidential information of the Organization obtained during their service as a Board Member, unless authorized to disclose such information.
6. Indemnification
The Organization agrees to indemnify the Board Member against all expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any claim, action, suit, or proceeding arising out of the Board Member’s service as a member of the Board, except in cases of willful misconduct or gross negligence.
7. Termination
Either the Board Member or the Organization may terminate this Agreement at any time, with or without cause, by giving written notice to the other party.
8. Governing Law and Venue
This Agreement shall be governed by and construed in accordance with the laws of the [State/Country]. Any action arising out of or relating to this Agreement shall be brought in the courts of the [State/Country].
By signing below, the Board Member agrees to the terms and conditions set forth in this Agreement.
[Organization Name]
By: ________________________
Board Chair
[Board Member Name]
By: ________________________
Board Member
CONCLUSION
In conclusion, having a board member agreement is an important step in ensuring that all board members are aware of their responsibilities and commitments. This sample agreement can be tailored to fit the specific needs of your organization and can be used as a starting point in drafting your own agreement. Remember to consult with legal counsel to ensure that your agreement complies with all applicable laws and regulations.