There are several reasons for a dispute with a corporate board of directors or board member in San Diego. The primary purpose of a Board of Directors is to independently monitor the decisions of corporate management and to provide guidance with regards to the direction of the company. There are often competing factions between larger shareholder groups and smaller minority interests.
Questions often arise around the fiduciary responsibility board members have to the corporation and to its shareholders. Is the board member operating in the best interests of the corporation and all shareholders, or is there an appearance of “sweetheart deals” or coercion to move business from the corporation to another company in which the board member owns or controls and interest?
A dispute with a corporate board of directors or board member may arise around compensation, especially when the CEO has too much influence on the board. The board may vote to provide compensation packages to themselves or the CEO which are not commensurate with the performance of the company or the work at hand. The improper distribution of funds is a common theme in lawsuits against a board of directors or its members.
Another is breach of fiduciary duty to the shareholders, or employees of the corporation. Failure of the board to adhere to corporate bylaws, accounting principles, auditing oversight, and to ensure proper corporate governance are other common areas of dispute. When a shareholder believes the Board of Directors is leading the company in the wrong direction, a derivative lawsuit may be required.
The attorneys at the Watkins Firm have managed disputes with a Board of Directors, board members, defense of board members and derivative lawsuits for decades. If you are concerned about the performance of a Board of Directors or a member of the board, or are a board member who faces potential litigation we invite you to contact us or call 858-535-1511 to discuss the dispute and strategies to successfully resolve it.