Can Felons Serve on Corporate Boards?

Being a convicted felon can be very limiting. Convicted felons usually cannot vote or serve on juries. Their ability to own firearms is restricted, as is their ability to travel to certain foreign countries that will not allow felons to enter. A felony conviction can also make it more challenging to get certain government licenses. What it generally doesn't do is prevent the felon from being legally eligible to serve on corporate boards.

The limitations on what felons can do generally don't apply to the corporate sphere. When Congress had an opportunity to prevent certain types of convicted felons from serving on the boards of charities, it chose not to take this action, either. Laws are so lax that not only can felons serve on the boards of corporations, but they can also usually form their own limited liability companies.

While a felon can sit on a board, he may not be able to get a license for some industries. It's unlikely that a state licensing board would grant a permit that allowed a convicted sex offender to run a day-care center, for example, and someone who did time for bookmaking might have trouble getting a gaming license. While it might not be necessary for a felon to have a license to sit on the board of a company in a regulated industry, this limitation could be a disqualifying factor that prevents the company from considering him.

Having a felon on a board can also cause trouble for a company. Some potential customers or vendors could be uncomfortable doing business with an organization that is led by a convicted criminal, while competitors could use it as a tool to smear the business. A felon's travel restrictions could make him unsuitable for a board whose members need to travel globally. Finally, if a board needs to get liability insurance or bonding, it could be challenging to get a felonious member covered.

Some felons found their way onto corporate boards after their release from jail. Financier Michael Milken serves on the board of Vistage International, a business coaching company that he partly owns. Martha Stewart serves on the board of directors of Martha Stewart Omnimedia. Rapper Snoop Dogg serves as Priority Records' chairman and was invited to ring the bell at the New York Stock Exchange, while notorious hacker Kevin Mitnick serves on the advisory board of computer security firm Zimperium.