San Diego Business Contract and Transaction Attorneys
Do you need a Board of Directors Retainer Agreement or Services Contract for your San Diego corporation? Over the past decade the process to identify and attract potential board members and compensate them has undergone significant change. This is due to the increasing workloads associated with serving on the Board of Directors as well as the risks and contingent liabilities associated with service. Recent increases in shareholder activism, proxy disclosure rules and even regulatory issues such as Sarbanes-Oxley have served as catalysts in these changes. The pressures on board members has resulted in a substantial increase of director remuneration.
Your corporation may require a well-crafted Board of Directors Retainer Agreement or Services Contract to attract and retain the right candidates for your corporation’s board. The business contract and corporate law attorneys at the Watkins Firm have decades of experience in transactional legal services and related contracts and agreements. Our corporate counsel can assist with the recruitment of and negotiations with board members as well as the crafting of related documents.
What are the Elements of a Successful Board of Directors Retainer Agreement or Services Contract
The primary issues contained within the Board of Directors Retainer Agreement or Services Contract are the Board Duties, the Compensation and the Benefits and Expenses.
The Board Duties should be quite clear regarding the term of service on the Board of Directors as well as expectations regarding the Director’s qualifications and the work they will do while they serve the board. This section of the agreement often focuses upon the specific skills and areas of expertise of the individual and how those will be used for the benefit of the corporation during the term of service on the board.
Compensation terms must address the amount of payment for the services of the director and how specifically those amounts are to be paid. This is also an area of the agreement which addresses additional compensation such as stock options and associated vesting.
The Benefits and Expenses section of the agreement often contains the commitment of the corporation to provide indemnification and insurance. It is customary for most corporations to provide an indemnification agreement and to purchase liability insurance on behalf of the director.
Fiduciary Duties and Responsibilities to the Corporation
Directors are held to a high legal standard of care, good faith, decision making and fair dealing. This should include but is not limited to a fiduciary duty to the corporation to put the interests of the corporation above the personal interests of the director themselves. Directors must usually agree to exercise reasonable care, skill and due diligence in all decision making and to exercise reasonable judgment. The Director should disclose and avoid any conflicts of interest, and refuse to accept any benefits or compensation from third parties as it relates to service as a director of the corporation.
Contact Experienced San Diego Board of Directors Retainer Agreement or Services Contract Attorneys
The quality, experience and skill sets of your Board of Directors will make a substantial impact on the profitability and success of your corporation and its vulnerability to litigation. Contact the experienced and proven business and contract attorneys at the Watkins Firm or call us for a free consultation at 858-535-1511. Our clients value the quality, substance and candor of our advice, and the cost-effective manner in which we serve them.