While the Board of Directors generally acts in unison for the best interests of the community, once in a while there will be a board member who goes “rogue”. Dissention is normal, and makes for an active board. However, when dissention goes too far, it can put associations in a bind.
A board member is considered “rogue” not simply because there is a disagreement; instead, he or she must take some kind of affirmative action in an attempt to subvert the majority of the board. For example, this could be e-mailing owners individually or trying to solicit support for something in opposition to what the majority of the board has already decided.
The Board of Directors for any association only has one voice, and that is the voice of the majority. When a board member begins to campaign or act against the majority decision, it places the remaining directors in an awkward and difficult position of how to address this “rogue” behavior.
Members of the Board of Directors are required to act prudently and reasonably in the best interests of the community, owing several fiduciary duties to the association. These duties include:
- Duty of care;
- Duty of loyalty;
- Duty of good faith;
- Duty of confidentiality;
- Duty of integrity; and
- Duty of full disclosure.
In the event that a board member acts in a manner not approved by the majority of the board, we recommend informing them of their fiduciary duties owed to the association. However, if the board member does not correct their behavior, there are options as to how the rest of the board can proceed:
- Request Resignation. The majority of the board can formally ask the “rogue” board member to resign. While there is absolutely nothing requiring that the “rogue” board member comply and step down from their position, it is a good faith first step to try to minimize the conflict.
- Removal. The process for removing a “rogue” board member depends on whether your association is subject to CCIOA. Directors can be removed with or without cause, but post-CCIOA communities must call an owner vote where at least 67% approve of the removal. Pre-CCIOA communities should look to their Bylaws for the requirements. Please note that while a majority of the board can remove an officer, this does not remove that officer from the board entirely; instead, the officer is essentially demoted to a director position, and then must be removed as a director.
Even if there are no issues among the board currently, associations should be proactive in implementing policies and amendments that will make it easier to address such behavior in the event a situation arises:
- Board Member Code of Conduct. The board can elect to adopt a Code of Conduct to guide the behavior of board members into acting appropriately. This Code of Conduct sets the tone for all board members and forces those serving to commit to ethical behavior in the best interests of the association.
- Update Qualifications. The board can also propose an amendment to the board member qualifications set forth in the Bylaws to include adherence to the Code of Conduct or specific fiduciary duties. In the event a board member “goes rogue” and violates one of these duties listed in the Bylaws, that board member would effectively have disqualified themselves from serving. Please note these amendments typically require a vote of the ownership.
Even if “rogue” board members are not a current problem for your association, all it takes is one disagreement for someone to go against the majority. It is always better to be proactive, rather than reactive, which is why we recommend all associations have some sort of plan in place should the need arise.
If you have questions about how to handle dissention among the board or how to address a specific board member’s behavior, please contact an Altitude attorney at 303.432.9999 or [email protected].