Q&A: When Board Members Resign

What should we do when board members want to resign before their term is over?

Occasionally, a member of our church will resign due to health problems or relocation. At what point is a resignation effective? And, is there any legal significance to the timing of a board member’s resignation?
The method, and timing, of a board member’s resignation is very important from a legal perspective, since it is the general rule that board members are not responsible for actions taken by the board prior to their election to the board (unless they vote to ratify a previous action). Similarly, directors ordinarily are not liable for actions taken by the board after their resignation. Again, they will continue to be liable for actions that they took prior to their resignation.
Here’s an example. Terry was elected by her church to serve a four-year term on the church’s board. After three years, Terry’s employer transferred her to another state. A few months after she moved, the church board approved a day-long youth group trip to a nearby lake, but failed to require an adult supervisor with CPR certification despite the fact that the lake that was selected for the outing did not provide lifeguards. One of the minors drowned, and could not be resuscitated. The victim’s parents sued the church, and they also sued the members of the church board as a result of their gross negligence in failing to provide adequate supervision for the trip. Terry was shocked to learn that she was named as a defendant in the lawsuit. She had assumed that she ceased to be a board member when she moved.
This example illustrates the importance of determining the timing of a board member’s resignation with clarity. How can this be done? There are several options. Most simply, board members can simply present a letter of resignation to the church board that is later approved by an official action that is recorded in the board minutes. This procedure should provide a sufficient basis for determining the date when a board member ceases to be a member of the board. Had Terry and her church board utilized this procedure at the time of her move, she would have reduced, if not eliminated, her risk of liability.
Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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