The Importance of Indemnifying Directors and Officers

Everybody has his or her gripes. As an in-house lawyer, mine are document retention policies and indemnification of directors and officers. They make my head hurt--literally. I get headaches when dealing with either. So, I bravely risk pain to advise my in-house colleagues on why today's terrible economy is reason to study up on the intricacies of indemnifying your board of directors.

Times are tough for the non-profit sector, as a GuideStar survey recently confirmed. Forty percent of charities reported that contributions were way down this year, and 8 percent said they were in imminent danger of shutting their doors. The survey's best news seemed to be that most charities at least were able to maintain operations despite the economic downturn. This is the time non-profits need experienced, capable, diverse and wise leadership on their boards and in their management, but the disincentives to such people are piling up.


Bruce D. Collins

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