There are material risks to a sponsor, PE fund and employees from having sponsor-appointed directors serve on portfolio company boards. There is not, however, a simple solution for fully mitigating those risks in light of the number of risks that exist and the variety of scenarios in which they can arise. Instead, PE sponsors need to employ a full arsenal of techniques across multiple levels, ranging from properly selecting the appointed employees to effectively erecting information barriers. Stringent adoption of those tools can help sponsors avoid litigation where possible and potentially succeed where it is not. This second article in a three-part series examines some of the best practices for mitigating risks when appointing board directors to portfolio companies, including exculpating contractual provisions and insurance coverage. The first article comprehensively reviewed the risks most commonly arising from PE board appointments, such as potential for breach of incompatible fiduciary duties and tenuous conflicted transactions. The third article will survey different scenarios in the arc of a PE investment that can introduce issues related to those board appointments. For more on directors, see “Closed‑End Funds of PE Funds: Considering Bespoke Valuation, Co‑Investment, Director and Tax Issues (Part Two of Two)” (Jun. 16, 2020); and “What Duty Do U.K. Directors of Portfolio Companies Have to Consider ESG Factors When Making Decisions?” (Nov. 5, 2019).