by Steven S. Weil, Esq.
While directors who act badly are a tiny minority of those who volunteer to serve on an association's board of directors, it's also true every now and then a bad apple ends up on the board. They might be abusive to residents and contractors, might mis-treat people based on their race, color or religion; they might disrupt meetings, speak out of turn, reveal executive session confidences or personal information about delinquent owners or purport to speak for the Association without the authority to do so.
The board is not powerless to deal with these problems. Here are some options and considerations that will apply to some of the challenges wild directors pose:
The personal touch
A private chat with a friendly director (or perhaps two but not more) behind closed doors can sometimes achieve positive results with a director who has acted badly.
Directors who act in good faith are typically going to be protected from claims provided they act in good faith, such protection coming from their right to be indemnified by the Association and/or its insurer. However, harassment based on someone's race, religion or other protected classifications can easily be characterized as not in good faith creating significant personal exposure for the director who is the target of such claims. Many directors assume they are fully protected and advising them they are not might help engender better behavior.
Strip the director of officer authority
In most associations, directors also serve as officers: President, Vice-President, Secretary or Treasurer. Generally, the board strips someone of their officer position. This is a way of punishing bad behavior and also limits that removed officer's mantle of authority as an officer.
Declare the director's position vacant
Generally, only the members can remove a director from serving on the board. A vote to do so can be initiated by 5% of the members or a majority of the board and one or more officers (check the bylaws). But, if a director no longer meets the qualifications for serving, the board can declare their position vacant. Sometimes, those qualifications include being a member in good standing and that can mean not being in violation of the CC&Rs. If the CC&Rs ban nuisance behavior and the director's harassment of residents rises to that level, a majority of the board might, in effect, be able to remove the director from the board. This procedure should not be undertaken without careful consideration and the advice of counsel.
Consider initiating a recall
Again, the decision to recall a director usually rests with the members but if a recall vote is initiated, directors can bring to the Association's attention the concerns about the difficult director. Of course, the targeted director can be expected to reply and the campaign could get ugly. Lots of rules are in play here including a ban on use of association funds for campaigning. Still, it is an option but not one to act on lightly.
Form a Committee of the Board
These are special committees think of them as sub-boards whose members must be directors but only those chosen by the majority of the board to serve. A Committee of the Board (sometimes called an Executive Committee) can deal with almost any subject consistent with the Committee's charter. Typically, this kind of Committee might handle big construction projects, important contract negotiations or governing document amendments. The difficult director can be excluded from this kind of Committee and, while he or she could attend Committee meetings, would have no vote on decisions made.
2010 COMMUNITY ASSOCIATION FINANCIAL HEALTH SURVEY
By Tyler Berding and David Levy
Copyright ©2011 BERDING | WEIL
All Rights Reserved.