Board members of state bodies who incur any personal civil liability in the course of carrying out their board functions will not be liable for the costs arising provided they have acted honestly and in good faith. It should be noted, however, that this indemnity does not apply to board members who act recklessly or in bad faith. In cases where board members act honestly but negligently they will not become personally liable but the minister may dismiss them from the board.
In common law, which applies to all companies including both commercial and non-commercial state bodies, a board member is deemed to have the following duties;
- to act bona fide, for a proper purpose and for the benefit of the company
- to disclose any personal interest or profit which may conflict with the interests of the company
- to use due care, skill and diligence in the exercise of his or her functions.
Specific responsibilities are imposed on board members of bodies which have been established under the Companies Acts and it is the responsibility of those board members to act in conformity with the applicable provisions of those Acts. The Companies Acts provide that actions by board members may be examined by a liquidator and may be brought to the attention of a court if they involve wrongdoing on the part of the board member.
Board members should contact the secretary to the relevant state body to inform themselves as to their legal responsibilities and to familiarise themselves with the requirements of company law and such other statutory provisions which have relevance for them in the exercise of their functions.