It is best to anticipate and prepare for problems and disputes rather than react after the fact. Particularly in small businesses, the bylaws may not have been consulted or reviewed in many years.
The business judgment rule insulates corporate directors from personal liability for mistaken decisions made with adequate information and in good faith.
Directors need to be informed concerning not only the law of the state in which they act but also the law of the state of incorporation.
A recent decision by the U.S. Court of Appeals for the Third Circuit, In re Lemington Home for the Aged, is a reminder to nonprofit corporation direc...