Introduction
The first of the 3 core fiduciary duties is the duty of care or duty of due care. This lesson will outline the meaning of this duty and offer board member expectations with links for further inquiry.
Definition & Meaning
“Due care is the level of caution and attention that a reasonable person is expected to exercise in a given situation to prevent harm to others. It involves making informed decisions and taking necessary actions based on the circumstances at hand. This standard is applicable in various contexts, such as driving safely or conducting thorough background checks. The specific interpretation of due care often varies depending on the legal context and the unique facts of each case.” legal-resources.uslegalforms.com/d/due-care
- Using your best judgement
- Active participation as a board member
- Reasonable Inquiry
- Informed decision-making
Board members are expected to:
- Attend board meetings
- Review packets sent out prior to meetings
- Research/inquire about unknowns to make informed decisions