A director has a duty of good faith and loyalty to the cooperative. This means that:
- A director owes allegiance to the cooperative and must act in the best interests of the cooperative while acting in his or her official capacity.
- A director should be diligent to ensure that the cooperative’s interests are pursued during the meetings of the board of directors.
- A director may not use the position for personal profit, gain or other personal advantage over other member shareholders of the cooperative.
- A director is accountable to the member shareholders of the cooperative for his or her official actions and can be held personally liable for fraud or breach of fiduciary duty in the conduct of the cooperative’s affairs.
- A director who exercises honest and reasoned judgment and acts reasonably and in good faith for the best interests of the cooperative will not be held liable for violation of his or her fiduciary obligation to the cooperative.
Read “BoD Code of Ethics” which must define a Director’s service.