Board members have a fiduciary duty which means they must exercise good business judgment, put the company’s interest first, and act in good faith.

Board members work in the following areas:

– They set policy for the company
– Evaluate the CEO
– Check the financial resources for sufficiency
– Approve annual budgets
– Provide updates to the investors for the company’s performance

If the company becomes insolvent then they must act on behalf of the creditors.

Board members are responsible for making sure taxes and employees are paid and may be held personally liable if they don’t.

Board members work under the protection of the business judgment rule.  

This means the board member is not liable unless they act in haste, are found to abuse their discretion, or breach their financial duty.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

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Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.