what is the legal duty of a nonprofit board member who is aware of crimes being committed against the non-profit from a partner company?

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what is the legal duty of a nonprofit board member who is aware of crimes being committed against the non-profit from a partner company?

We are a non-profit and we have had fraud and coercion committed against us with rock solid proof every board member is aware of these crimes but takes zero action against the partner company. What is the legal duty of the board members who are aware of such crimes.

Asked on April 5, 2018 under Business Law, New Mexico

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Board members have a fiduciary duty to the non-profit. This duty is imposed by law. This requires them to act with honesty and integrity towards the non-profit, and to also take sreaonable care to protect it and advance its interests. Allowing someone (e.g. the partner company) to steal from the non-profit is a clear violation of fiduciary duty. A violation of fiduciary duty can 1) provide a basis to remove them as board members; and 2) provide grounds to recover monetary compensation from them. Speak with an attorney who handles corporate or nonprofit litigation to explore bringing a legal action on behalf of the nonprofit against is board.


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