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Commentary

A Director's Duty Is to Act Prudently

The notion that volunteer directors generally underperform has no more credibility than the idea that financial rewards for individual directors is the driving force and significant difference between healthy corporations and failed corporations.

The vagarious notion that volunteer directors, and the organizations they serve, generally underperform has no more credibility than the contention that greater financial rewards for individual directors is the driving force and significant difference between healthy, thriving corporations and failed corporations.

Director compensation, or lack of it, neither imposes nor cancels regulatory performance requirements for individual directors. Whether a director serves voluntarily or receives some compensation, the exercise of wisdom and ethical conduct in all his and her fiduciary duties, responsibilities and regulatory obligations to stakeholders is paramount.

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Peter Westerman

 

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