The Board of Directors are not liable in this case. The Board of Directors must rely on reports developed by people whose job it is to develop these reports. While the Board should certainly scrutinize those reports, it doesn't mean they have to be experts on all the details of each of the reports it receives. The Board must rely on the advise and expertise of its financial staff. as well as that of other professional staff. If the Board starts micromanaging, the professional staff will become frustrated and leave. Once the Board has reason to doubt the reports, then they can be more heavily involved. If anything should happen in this case, it would be to replace the chief financial officer who prepared the reports. Additionally, the stockholders could replace some members of the Board at the next election. The Board can't be held liable just because they received poor advice from the financial department.