Board members’ responsibilities for business compliance

The term Board is used to cover a wide range of governing bodies, including Directors, Trustees, management committee and executive committee. The Board is responsible for governing and leading the social business as identified in its legal rules.

Your Board should have the necessary skills, knowledge and experience to manage and lead the social business to ensure it delivers its mission and discharges all legal and regulatory requirements. This will involve ensuring that:

  • Board members are legally appointed
  • All Board members are aware of their individual and collective responsibilities
  • All relevant business compliance requirements are met
  • Legal, systematic and proper oversight of delegation to officers, sub-committees or paid staff and volunteers.

What might happen if board members do not take full responsibility for all relevant business compliance? First you need to understand liability.

Personal liability: An unincorporated business does not have its own identity and as such its owners are personally liable for its debts and for any lawful action brought against the business. Liability is unlimited. 

Limited liability: A limited liability business has its own legal identity, distinct from its Board members and members, meaning that only the business is liable to pay its debts or for any lawful actions; the Directors and members are protected from liability. There are special and rare circumstances when individual Board members may find themselves personally liable.

The purpose of this guide is to make you aware of your legal duties as Board members and to support you to ensure your business is legally compliant in every sense of the word. Fulfilling your legal roles and responsibilities as Board members of a limited liability business should ensure that you minimise any risk of being personally liable for any debts or legal action brought against you.

There are various areas where liability might arise in running a business as follows:

In this section:

Appointing Board Members

Roles and responsibilities of Board Members


Want to discuss the topic further? Contact or your dedicated Business Advisor.