Being a member of a Board of Directors may sound like an easy job. Meet four to six times a year . . . ask management some questions about operations . . . make a few suggestions to management . . . grant the Board some more stock options . . . and leave the rest for the CEO of the Company to do.

Although this is sometimes an accurate description of the life of a Board member, there are other times when being a Board member can be a much tougher job. Here are a few of the toughest issues Board members face that present both business challenges and potential legal liability for Board members.

1. The CEO of the Company tells you he wants to buy out all the other shareholders of the Company through a freeze out merger and is counting on your support to push this through quickly. What do you do?
2. The CFO informs you that the CEO and his wife are charging their personal expenses to corporate accounts. Over $250,000 during the past six months is involved. The CFO is continuing to look at prior year financial records. What do you do?
3. Your wife is suffering from poor health. You would like to resign from the Board, but the Company is about to announce an unexpected significant loss. The CEO requests that you not send a negative message to the market through a resignation. What do you do?
4. Management has delivered a report to the Board that predicts a 200% increase in unit sales and requests increases in budget to increase production. However, sales decreased in the past quarter and the economy looks like it is headed into recession. Increasing production would require doubling the corporate debt of a company that already has substantial leverage. What do you do?
5. The Vice President of Marketing has just resigned to join a competitor. You have 30 years of experience in marketing in the Company's industry. The Board looks to you to fill in the gap for six months until a new Vice President of Marketing is recruited. You recently retired and were looking forward to working on your golf game. What do you do?
6. You have been elected to the Board by a class vote of the Series B Preferred Stock. The owner of a majority of the Series B Preferred Stock is trying to liquidate it's venture capital fund. That shareholder wants to sell the Company immediately even though the market for it's industry is currently depressed and the likely sales price will just pay off the liquidation preference of the Series B Preferred Stock with little left for other shareholders. The Series B Preferred shareholder who elected you to the Board of Directors wants you to vote to approve the sale. Other shareholders oppose the sale of the Company at this time. What do you do?
7. The Board is considering whether to purchase a company owned by the son of another member of the Board of Directors. The price has been supported by numbers provided by the Company's investment banker. You, however, are aware of several similar companies that have recently sold for half the price the Board is currently considering. The investment banker's data does not include the companies you know about. What do you do?
8. The Board is considering selling the current business and investing the proceeds in a new business being proposed by the CEO's son-in-law. You believe the current business is well positioned to grow and believe the son-in-law lacks experience to operate the new business. The CEO, however, has received the votes of all the other Board members and requests unanimous support from the Board. What do you do?
9. The Board is considering selling the Company. There is a dissident group of shareholders who oppose the sale. The vote is next Thursday. Your wife suggests you schedule a vacation so that you will not have to vote on the sale and thereby avoid being used by the dissident shareholders. What do you do?
10. Another director insists on having his personal attorney attend all Board meetings to provide him with legal advice before he votes. You believe this practice has interrupted discussions of business by the Board. The CEO wants to prohibit the attendance at Board meetings by personal attorneys of Board members. What do you do