This is caused since the high availability daemon (HAD) must have rights to share the drive/folder.

 

HAD runs as a service logged in as the Local System account. If the Local System account has no access to the drive/folder that Cluster Server is sharing, HAD cannot bring the Fileshare resource online.

 

To resolve this condition, in addition to the desired security settings, the Local System account needs to have minimum NTFS permissions of "List Folder Contents" or "READ" to the directory.  

 

NOTE: Ensure the FileShare is offline before performing below steps.

 

1) This can be modified by right clicking on the directory which is to be shared, and selecting properties.

2) Select the Security tab at the top for the Properties window and click "ADD" 

3) From the "Select Users, Computers, or Groups" window, select the Local System account (SYSTEM) and click "ADD", then click "OK" 

4) From this Properties window select the desired  permissions (List Folder Contents or Read as a minimum) and click "OK" (Figure 4)

5) Probe the FileShare resource once from VCS console and attempt to bring the service group online.  The directory will now be shared with the correct security.