There are primarily two requirements that must be followed in order to maintain corporate protection: 1) The Rule of the Prudent Person. Board members are tru

There are primarily two requirements that must be followed in order to maintain corporate protection: 1) The Rule of the Prudent Person. Board members are trusted individuals and this protection is provided as it is assumed that the board member will act reasonably for the best interest of the business. The prudent person rule essentially states that board members are protected from personal liability as long as they act “as a reasonably prudent person under the same or similar conditions”. So basically, if your peers would think you acted contrary to your duty, then the protection may not be available. 2) Duty of Loyalty. As a board member, conflicts of interest should be avoided. Therefore, the protection otherwise provided may not be there if actions or decisions are made to benefit yourself instead of the business. Commonly, this occurs when a board member votes in favor of an action to provide himself or his family with financial gain or support a business venture he owns. Keep in mind, while financial gain is a typical motive, it is not required to breach the duty of loyalty. https://bgswlaw.com/incorporation-personal-liability-protection/ https://bgswlaw.com/incorporation-personal-liability-protect...