Bench & Bar

JAN 2018

The Bench & Bar magazine is published to provide members of the KBA with information that will increase their knowledge of the law, improve the practice of law, and assist in improving the quality of legal services for the citizenry.

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Page 19 of 75

| JANUARY/FEBRUARY 2018 18 A s members of a profession that encourages and values public service, many attorneys serve as members on nonprofit boards, or they provide legal counsel to non- profit entities with governing boards. In some instances, an attorney may serve in dual roles as both a board member and the attorney for the nonprofit corporation. Regardless of whether they advise nonprofit entities and/or serve on the board of a nonprofit entity, it is important that attorneys as board members and legal advi- sors understand their corporate roles and fiduciary obligations when serving in these capacities. Additionally, attorneys need to under- stand the ethical obligations imposed on them, and potential issues that may arise, as a result of serving on a nonprofit board. is article will address some of the corporate fiduciary duties and responsibilities of a board member, as well as some of the ethical obligations imposed on lawyers serving on a nonprofit board. is article will also briefly touch on the duties of advisory board mem- bers and the managers of an unincorporated nonprofit association. CORPORATE FIDUCIARY DUTIES AND RESPONSIBILITIES OF A DIRECTOR e board of directors is vested with the management of the nonprofit corporation, and board members are required to discharge their duties in (a) good faith; (b) on an informed basis; and (c) in a manner they honestly believe to be in the best interests of the corporation. 1 A board member shall be considered to have discharged his duties on an informed basis if he or she makes decisions or takes action with "the care that an ordinarily prudent person in a like position would exercise under similar circumstances." 2 is is known as the "business judgment rule." 3 Features: NONPROFIT LAWS & REGULATIONS

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