Board members: You may have more at risk than you realize! – Directors
across Canada were shocked by the aftermath of a tragic single-vehicle
accident which took the lives of 3 young men near Bracebridge last year.
In addition to alcohol, speed was also determined to be factor as the
vehicle tore through a guardrail , launching itself through trees to
rest submerged in the Joseph River. It was later determined the victims
died of drowning. The sole survivor – a 19-year old woman – was able to
free herself and was found standing on the road by the first respondent.
The foursome (all 19 and 20 years old) had spent a July 2008 afternoon
at a Muskoka-area restaurant. Their tab showed the four had paid for 31
drinks.
The restaurant was owned by ClubLink Corp., which owns over 30 golf
clubs in Ontario and Quebec. It was not surprising, given the severity
of the incident, for Clublink bar staff to be charged with over-serving
- an offence under Ontario’s Liquor Licence Act.
What was surprising – and unusual – was that Liquor Licence Act charges
were laid against senior directors and officers of the corporation.
Only now, after 10 months, many of those charges have been withdrawn by
the provincial Attorney General.
So what can we learn? These corporate officers and directors were
remunerated for their work. But the point is this: even those of us who
are unpaid directors or board members can be assuming much more
liability than we realize.
Most of us have agreed to work on the board or committee of some small
organization or community event. But the law is clear: just because you
serve as a volunteer does not shield you (and your assets) from personal
liability.
Our societal culture is defined in part by many volunteer organizations
that enhance our lives: school councils, daycare centers, churches, kids
clubs, sports organizations, craft cooperatives. Every such entity has
what the law refers to as “controlling minds”. These people can be
exposed to the consequences of liability of the organization. A
carefully tailored Directors’ and Officers’ liability insurance policy
is a significant part of the answer.
It’s tough enough to undergo a legal review of your competence or
discharge of responsibility, when you were trying to enhance the life of
your community as an unpaid volunteer. But it’s far more painful if
your personal assets are potentially exposed to litigation for something
that went wrong.