Could a circuit judge serve on a local bank board that approved substantial loans and paid directors?
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This page answers the general question as of 1999. Ask about yours and see what the current rules of professional conduct in your state say for your facts, with citations.
Plain-English summary
A circuit judge was asked to join a local bank board that met monthly, paid directors cash or stock, and approved loans of roughly $150,000 to $250,000. The board did not run the bank's daily operations.
The Commission permitted service, including the proposed loan approvals, if the judge observed Canons 2C, 5C, and 5D. The facts did not suggest that monthly board duties would interfere with judicial work, and normal comparable director pay did not appear to violate Canon 6.
The opinion required recusal when the bank was a party, subject to Canon 3D remittal. If board service disqualified the judge from a significant number of ordinary cases, the Commission said the judge should not serve.
Currency note
This opinion was issued in 1999, after the Alabama Supreme Court's 1975 adoption of the Alabama Canons of Judicial Ethics. Subsequent amendments or later opinions may have changed the analysis. Treat this page as historical context and verify the current Canons and linked opinion before relying on its conclusions.
Common questions
Q: Did the proposed loan-approval role bar board service?
A: No. The Commission allowed it on the described facts within the cited Canon limits.
Q: Could the judge hear a case with the bank as a party?
A: No, absent permitted remittal under Canon 3D.
Q: Did the proposed director compensation itself violate Canon 6?
A: No potential violation appeared in the stated facts, provided compensation was reasonable and comparable.
Background and rules framework
Alabama Canon 2C limited lending judicial prestige; Canons 5C and 5D governed financial and fiduciary activities; and Canon 6 limited outside compensation. The opinion also applied recusal and remittal to bank-party cases under Canon 3D.
Citations and references
The opinion cites Alabama Canons 2C, 5C, 5D, and 6, discusses Canon 3D, and cites Advisory Opinions 76-9, 79-60, 93-474, and 97-673.
See also
Source
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Landing page: Alabama JIC advisory opinions
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Original PDF: Advisory Opinion 99-723
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Canon history: Alabama JIC, Canons of Judicial Ethics
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
JUDICIAL INQUIRY COMMISSION
DATE ISSUED: MARCH 26, 1999 ADVISORY OPINION 99-723
SERVICE ON BANK BOARD OF
DIRECTORS
ISSUE
Mayajudge serve on the board ofdirectors of
a bank located in the county where the judge
presides? Answer: Yes, so long as the judge
does so within the constraints of Canons 2C,
5C, 5D, and 6.
FACTS
A circuitjudge has been asked to serve on the
board of directors of a bank located in the
county where the judge presides. The board
will meet monthly. Members will be
compensated at a rate of $100 to $150 per
meeting, and will have the option of being
compensated with shares ofstock in the bank
in lieu of cash. The board will not be
involved in making decisions in the day-to
day operations of the bank, but it will have
authority to approve loans in the range of
$150,000 to $250,000.
DISCUSSION
The Commission has previously decided that
ajudge may serve on the board ofdirectors of
a bank, but that a judge who does so should
be ever mindful of the provisions of Canons
2C and 5C. See Advisory Opinions 79-60, 93
474, and 97-673.
Canon 2C provides that a judge "should not
lend the prestige of his office to advance the
private interests of others; nor should he
convey nor permit others to convey the
impression that they are in a special position
to influence him." As the Commission noted
in Advisory Opinion 97-673, "others" in this
instance include abank where thejudge serves
as a director.
Canon 5C provides as follows, in pertinent
part:
(1) A judge should refrain from
financial and business dealings that
tend to reflect adversely on his
impartiality, interfere with the proper
performance of his judicial duties, or
exploit his judicial position.
(3) Ajudge should manage his
. . . financial interests to
minimize the number of cases
in which he is disqualified.
Canon 5D also is pertinent. Canon 5D(1)
provides that a judge should not serve as a
fiduciary ifit is likely that he will be engaged
as a fiduciary in proceedings that would
ordinarily come before him as ajudge. Canon
5D(2) states that, "while acting as a fiduciary,
a judge is subject to the same restrictions on
financial activities that apply to him in his
personal capacity."
Since the board of directors in this case will
not be involved in the day-to-day operations
of the bank and is expected to meet only
monthly, it does not appear that service on the
board will interfere with the proper
performance ofthejudge'sjudicial duties. In
the opinion ofthe Commission, thejudge may
serve on the bank's board of directors,
including participation in the anticipated loan
approval activity of the board, so long as the
provisions in Canons 2C, 5C, and 5D are
observed.
OPINION 99-723
PAGE 2
Service on a bank's board ofdirectors requires
disqualification of the judge from any
proceeding in which the bank is a party, but
such disqualification is subject to remittal
under Canon 3D. Advisory Opinions 76-9,
93-474, and 97-673. If service on the bank's
board causes disqualification of the judge
from a significant number ofproceedings that
would ordinarily come before him as a judge,
then the judge should not serve on the board.
Under Canon 6, a judge may receive
compensation for extra-judicial activities per
mitted by the canons, ifthe source ofpayment
does not give the appearance of influencing
the judge in his judicial duties or otherwise
give the appearance of impropriety, and the
compensation does not exceed a reasonable
amount nor what a person who is not a judge
would receive for the same activity. The
Commission has previously held that a judge
may receive the normal remuneration for
service on a bank's board of directors that is
allowed other directors, so long as such
remuneration is commensurate with that
normally paid for such service. Advisory
Opinion 97-673. The Commission finds no
potential violation of Canon 6 in the facts
presented in this case.
REFERENCES
Alabama Advisory Opinions 76-9, 79-60, 93
474, and 97-673.
Alabama Canons of Judicial Ethics, Canons
2C, 5C, 5D, and 6.
This opinion is advisory only and is based on
the specific facts and questions submitted by
the judge who requested the opinion pursuant
to Rule 17 of the Rules of Procedure of the
Judicial Inquiry Commission. For further
information, you may contact the Judicial
Inquiry Commission, 800 South McDonough
Street, Suite 201, Montgomery, Alabama
36104; tel.: (334) 242-4089; fax: (334) 240
3327; e-mail: [email protected].
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