As a board member, you take on a number of important obligations for your community.  You try to complete each of them to the best of your ability.  However, what do you do when the situation is beyond the scope of your knowledge? How about unpopular decisions that you know will be challenged by the members?  What about when the board is fractured with valid arguments on all sides for which is the “right” course of action? When is the time to call in the experts?

All board members have fiduciary duties to their association.  The “fiduciary duties” encompass many aspects that should be considered prior to making board decisions.  Board members need to consider whether they are acting within the powers and duties conferred by the governing documents; whether they are following the procedures as laid out by state statute as well as their specific covenants; and if the decision impacts the budget of the association, are they spending the association’s money in a responsible and reasonable manner.  Another board duty specifically enumerated in the Colorado Revised Nonprofit Corporation Act is the duty to make decisions on an informed basis.

If the board is debating whether a specific action is the best or legally correct route to take, an opinion letter from counsel will not only direct the board to the correct course of action by also provide “protection” for the board if owners challenge this decision in the future because the board complied with its duty to become informed prior to making the decision.  The board will be able to inform the membership that the decision was not made based upon the whims of the directors but only after consultation with an expert in the field.

Reliance upon the opinion of an expert is the best way to uphold the fiduciary responsibility of the board to make decisions on an informed basis.  Many associations have members that like to question every action and decision of the board.  Seeking the advice an expert when faced with a potentially unpopular or controversial matter will allow the board to feel confident that its decision will hold-up to challenge by members and will protect them from liability even if the decision later turns out to be wrong.

Board members often make the mistake of guessing on the correct interpretation of their documents.  Even with the best of intentions, it is never a good idea to make an uniformed decision.  Therefore, if there is room for debate or the matter is not perfectly clear, call in an expert.  Once you have consulted with an expert, the board can be sure that it is working not only with good intentions but also in the best interest of the association.

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