What action can a director take to avoid liability for dissenting board decisions?

The action a director can take to avoid liability for dissenting board decisions is to submit a written dissent or abstention. This approach provides formal documentation of the director’s disagreement with the board's decision, which is essential for establishing a record of dissent. By presenting a written dissent, the director clearly communicates their position and ensures that their disapproval is recognized and acknowledged within the corporate governance framework.

Documenting dissent is crucial for protecting a director from potential liability related to decisions made by the board, especially if those decisions result in litigation or adverse consequences for the corporation. The written documentation serves as evidence that the director was not in agreement with the action taken, thereby safeguarding them from being held accountable for any negative outcomes that may arise as a result of that decision.

Other actions, while they may express disagreement, do not establish a formal record that is as effective in protecting a director from liability. For example, verbally expressing disagreement during a meeting lacks the permanence of a written record and may not adequately convey the director’s position. Similarly, filing a notice of abstention with the secretary does not provide the same protective measure as a written dissent. Requesting a special meeting does not necessarily convey dissent on a particular decision and may not absolve a director of liability