2006-01: Judge Serving on the Advisory Board of Directors of a Bank 

DISCLAIMER:  This Opinion interprets the 1993 Illinois Code of Judicial Conduct, which was superseded on January 1, 2023, by the 2023 Illinois Code of Judicial Conduct.  This Opinion does not consider or address whether the 2023 Code affects the analysis or conclusion of the Opinion.  A table cross-referencing the 1993 Code to the 2023 Code can be found at IJEC CORRELATION TABLE.

IJEC Opinion No. 2006-01

January 20, 2006

TOPIC

Judge serving on the advisory board of directors of a bank.

DIGEST

A judge may not serve on the advisory board of directors of a bank.

REFERENCES

Illinois Supreme Court Rules 65C and 66; Illinois Judicial Ethics Committee Opinion No. 97-7; Jeffrey M. Shaman et al., Judicial Conduct and Ethics sec. 7.14, at 228 (3rd ed. 2000); American Bar Association Committee on Ethics and Professional Responsibility Formal Opinion No. 254 (June 26, 1943) and Informal Opinion No. 1385 (February 17, 1977); Florida Committee on Standards of Conduct Governing Judges Opinion No. 75-15; Kentucky Judicial Ethics Committee Opinion JE-67 (undated).

FACTS

A judge has been asked to serve on the advisory board of directors of a bank. The board is advisory only and has no authority to approve loans or investments or otherwise govern the bank. The purpose of the advisory board is to assist the president of the bank in developing strategies for expanding the bank’s services in the community. The advisory board meets quarterly and each advisory board member receives $250.00 per meeting.

QUESTION

May the judge serve as a member of the advisory board of directors of a bank?

OPINION

Illinois Supreme Court Rule 65C(2) contains an absolute prohibition against a judge serving as an officer, director, or employee of a business. In pertinent part, Rule 65C(2) provides:

…a judge may hold and manage investments, including real estate, and engage in the activities usually incident to the ownership of such investments, but a judge should not assume an active role in the management or serve as an officer, director, or employee of any business. (Emphasis added.)

The prohibition against serving as an officer, director, or employee of a business is based, in part, on the fact that a judge’s active association with a commercial enterprise usually results in the “real or apparent exploitation of the judicial office. “ Jeffery M. Shaman et al., Judicial Conduct and Ethics sec. 7.14, at 228 (3rd ed. 2000). The American Bar Association Committee on Ethics and Professional Responsibility (ABA Committee on Ethics) describes one way in which the prestige of judicial office may be misused when a judge serves as the director of a bank:

A certain amount of publicity is given by all banks to the personnel of their boards of directors. Accordingly, publicity would be given to the fact that the bank had a judge on its board. This might create reasonable suspicion that the judge was utilizing the prestige of his office to persuade others to patronize the bank. The Canon [Canon 25 of the ABA Canons of Judicial Ethics (1924)] condemns such conduct.

ABA Committee on Ethics Formal Opinion No. 254 (June 26, 1943).

Describing the board of directors as an “advisory“ board does not avoid the prohibition against serving as a director of a business. Rule 65C(2) contains no exception permitting judicial membership on an “advisory“ or “honorary“ board of directors because the danger of exploitation of the judicial office remains regardless of the board’s title. Simply put, service on a board of directors, or other body intended to further a business’ commercial purpose, however the board or other body is characterized, is prohibited. See ABA Committee on Ethics Informal Opinion No. 1385 (February 17, 1977) (Canon 5C(2) of the 1972 ABA Model Code of Judicial Conduct prohibits a judge a from serving as an “honorary“ director of a bank); Kentucky Judicial Ethics Committee Opinion JE-67 (undated) (service on “advisory“ board of a bank is prohibited); and Florida Committee on Standards of Conduct Governing Judges Opinion No. 75-15 (prohibition against serving as a director of a business prohibits service as an honorary or advisory member of the board of a bank).

Because both compensated and uncompensated business directorships are prohibited by Rule 65C(2), the fact that advisory board members receive $250.00 per meeting is not important to the conclusion expressed in this opinion. However, judges must be mindful of three provisions of the Code of Judicial Conduct (Code) when contemplating providing services to a business entity in return for compensation.

First, a judge may accept compensation only for law-related and extra-judicial activities permitted by the Code. Compensation may not exceed a reasonable amount nor may it exceed what a non-judge would receive for the same activity. Compensation may not be accepted if the source of the payment gives the appearance of influencing judicial acts or otherwise gives the appearance of impropriety. Rule 66.

Second, if the nature or amount of the compensation, or other circumstances surrounding the transaction would render the judge an “employee“ of the business, the relationship is prohibited. Rule 65C(2).

Third, a judge must refrain from financial or business dealings, that (1) tend to reflect adversely on the judge’s impartiality, (2) interfere with the proper performance of the judge’s judicial duties, (3) exploit the judge’s judicial position, or (4) involves the judge in frequent transactions with lawyers or persons likely to come before the court on which the judge serves. Rule 65C(1).