By: Elina B. Gilbert, Esq.
Pursuant to the Colorado Revised Nonprofit Corporations Act and most governing documents, associations have authority to create, change, and disband committees, as well as the right to appoint and remove persons to/from such committees. Committees are useful tools to assist boards with managing their duties and building goodwill in their communities.
Committees allow boards to delegate tasks and obtain assistance for specific and open-ended projects. 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 recommendations of committees tend to be viewed as more legitimate by owners.
However, poorly managed committees may result in more harm than good. If a committee is created with no written parameters addressing the purpose of the committee, its authority, duties, etc., committee members may start acting outside the scope of their authority because they were not provided with guidance as to their roles.
To minimize the chances of committees running amok, it is imperative to prepare committee charters when new committees are created. Committee charters should define the purpose, authority, responsibility, and limitations of the pertinent committee and its members.
Below is a checklist of items committee charters should 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 act?
Do not hesitate to contact our attorneys with any questions about committees or creation of committee charters at 303.432.9999 or at [email protected].