Creation of committees is one of the tools boards can use to help manage their duties and involve the community members in the management of the association. Committees, if properly created and managed, can be extremely valuable to boards and the overall wellbeing of an association.
Committees allow boards to delegate authority and obtain assistance for specific duties. Use of committees frees time for board members to focus on other issues and develops a team approach to resolving community-wide issues. Community members who are involved in the committee process feel empowered, and board decisions made upon recommendation of committees tend be viewed as more legitimate by other owners.
Notwithstanding the above, if a committee is not properly created or managed, it could prove to do more harm than good. If a committee is created by a board with no written parameters addressing the purpose of the committee, its authority, duties, etc., committee members may believe they have more authority than they actually do and take actions that the board never intended for them to take.
In order to minimize the chances of committees running amok, it is imperative for boards, when creating committees, to also prepare committee charters. The overall purpose of a committee charter is to define the purpose, authority, responsibility, and limitations of the committee and its members.
If you have never drafted a committee charter or aren’t sure what information to put in the charter, below is a checklist of items committee charters must address:
- Committee name—the name should be related to the purpose of the committee.
- Purpose of committee—state the general purpose (with details to follow in the body of the charter).
- Structure of committee—effective committees need a chair; will a board member chair the committee? Remember, pursuant to CCIOA, a committee chair must meet the same qualifications as a board member. How many committee members will there be? Aside from the chair, do committee members each have a separate role? If so, this must be identified. How often must the committee meet? Will notice to owners or the board be required? Just like board meetings, committee meetings must be open to owners who wish to attend and it is probably a good idea to include this in the charter.
- Authority of committee—does the committee have any powers? For example, can committee members make decisions without going through the board? If so, you need to carefully set forth the parameters of such authority to ensure there is no abuse. Is there authority to spend money or sign documents? Are committee members entitled to reimbursement if they spend money for committee purposes?
- Limitations on authority—This is the section where the association spells out what the committee is not authorized to do. By way of example only, many charters prohibit committees from making actual decisions, and only allow recommendations to be made to the board. Other charters prohibit committees from incurring fees or making any expenditures on behalf of the association.
- Responsibilities of committee—What is the committee required to do? This should relate to the purpose of the committee. This is the section where you will spell out everything that is expected from the committee and its members. is the committee required to take minutes? Does the committee have a duty to report to the board or provide the board with recommendations? When and how often?
- Term of committee—how long will the committee be in existence? Is it perpetual or for a limited time only?
- Identity of committee members—thoughtfully appoint committee members who you believe have the requisite skill and interest to be part of the committee. Make it clear that the Board has power and sole discretion to appoint and remove committee members.
- Relationship of committee to board—require the committee to provide regular updates to the board. Clarify whether board approval is required, and if so, for what actions.
- Relationship of committee to managing agent—is the committee entitled to communicate with the manager or must all communications go through the board? If the committee is authorized to communicate with the manager, what is the acceptable scope of such communication? Can the committee direct the manager to take action?
Committee charters are extremely useful and necessary when it comes to creating and using committees, so please do not hesitate to contact an Altitude Community Law attorney at 303.432.9999 if you have any additional questions concerning creation of committees and committee charters.