§ 12370 Director Duties And Liabilities

Corporations Code·California

AI SummaryVerified

This law says that corporate directors must follow the same duties and can be held liable even if they are not paid for their role.

Key Takeaways

•Directors are responsible regardless of whether they receive pay.
•All duties and liabilities apply equally to unpaid directors.
•The corporation can enforce these rules against unpaid directors just like paid ones.

Example

A nonprofit board member who volunteers their time and receives no salary makes a decision that harms the organization.

Because the board member is a director, the law treats them like any paid director— they must act responsibly, and if they fail, they can be sued or face penalties, even though they weren’t paid.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source

View on CA.gov

§ 12370 Director Duties And Liabilities

Any duties and liabilities set forth in this article shall apply without regard to whether a director is compensated by the corporation. (Added by Stats. 1982, Ch. 1625, Sec. 3. Operative January 1, 1984.)

Last verified: January 10, 2026

Key Terms

duties and liabilities director compensated by the corporation

References

Official text at leginfo.legislature.ca.gov
California Legislature. Corporations Code. Section 12370.

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References