You are totally indemnified from liability in the conduct of your responsibilities for the company. But that indemnification doesn't hold if you can be found responsible for illegal, inappropriate action. In addition, board members must be careful to avoid the appearance of a conflict of interest. In fact, Tufts' Krimsky thinks that actual or perceived conflicts of interest are so serious and so damaging that academic scientists asked to join a board should just say no. Besides the obvious quandary that occurs when a board member is called upon to give a scientific evaluation of the work of a company in which he or she has a stake, conflicts can arise when a scientist directs a student to a particular area of research that may be of interest to the firm.
Conflicts can become an issue when a scientist serves as an expert adviser to government agencies.
And they can occur when the time a scientist spends working on company-related business detracts from the time he or she spends on academic pursuits. We can't get it from the companies. We're not going to get it from the government. And therefore what we're left with are very few places in which an expert can be considered by the public to have an independent role in society. Serving as a director can be quite lucrative.