“Serving on a board of directors entails more than just a prestigious title or a front-row seat to the company’s daily operations; it involves personal liability. A board member can face liability for damages due to mere negligence or passivity, and certain serious, intentional omissions can even lead to criminal liability. Ignorance or turning a blind eye does not absolve one of responsibility, as the Limited Liability Companies Act obliges board members to inform themselves. It is advisable to thoroughly understand the background of matters before signing off on them and to react promptly to any issues identified. If a decision is reached that one considers erroneous, it is good practice to have one’s dissenting view recorded in the minutes; this is the only way to demonstrate later how one acted in the situation. However, one need not possess all the expertise personally; seeking expert assistance in advance during challenging situations is a prudent risk management measure.”
