2009-28 (September 16, 2009)
Service on Board; Canon 2

Issue: May a Judicial Official serve on the board of directors of a publicly-held company?

Response: A Judicial Official has inquired about the propriety of serving on the board of directors of a publicly-held company engaged in business having no connection to the legal profession. The Judicial Official’s duties as director would include, but not be limited to, attending quarterly board meetings, serving on committees, completing financial reviews of the company, evaluating compensation packages and voting on actions. The Judicial Official would receive compensation, as well as stock options, in exchange for his or her service.

Based on these facts, the participating members of the Committee agreed that the Judicial Official should not accept a position on a publicly-held company’s board of directors, because to do so would effectively “lend the prestige of judicial office to advance the private interests of others,” in violation of Canon 2 (b) for the following reasons: As a member of the board of a publicly traded company, it appears clear that the Judicial Official’s name and biographical information would have to be disclosed to the SEC and in other publicly available regulatory filings. A shareholder could reasonably attach investment significance to the fact that a sitting judge is a member of the corporate board, thereby increasing the likelihood that the Judicial Official’s service on the board could objectively be perceived as improper. The Committee noted, however, that the current Code of Judicial Conduct allows a Judicial Official to operate a business, subject to financial reporting requirements. The Committee also observed that proposed Rule 3.11 of revised Code of Judicial Conduct, when enacted, would ban service as an officer, director, manager, general partner, or advisor of any business except for a business closely held by the judge or members of the judge’s family or a business entity primarily engaged in investment of the financial resources of the judge or members of the judge’s family.