Can the church hold its board members liable corporately or individually for mishandling situations involving the church?
If the board was exercising reasonable business judgment in a transaction for the church, then it is not liable if the action results in a bad outcome. Board members do not have to be perfect. They can make mistakes, just as we all do, without facing liability. If the board was not acting in a proper business capacity, such as stealing church money, then in that instance the church can bring a claim against the board. We have also encountered church splits where certain factions have brought claims against board members claiming that the board was not following their duties or exceeding their powers under the church’s governing documents.
