Conducting Board of Directors Meetings

Excerpted from a publication by Levine & Vanitzian, 2014. Zachary Levine, partner at Wolk & Levine, a business and intellectual property law firm, co-wrote this column. Vanitzian is an arbitrator and mediator.

Board directors cannot delegate non-delegable duties such as conducting meetings and making motions. A manager (or attorney, admin comment) has no legal authority to preside over any board meeting, nor can he motion a vote, let alone move to adjourn the annual meeting. There is no requirement that managers even attend board meetings, and it is generally better if they do not.

Corporate powers, activities and affairs shall be conducted and exercised by or under the ultimate direction of the board. There are many board directors’ duties that are non-delegable, and as fiduciaries, board directors cannot delegate statutory duties to anyone. Although the board may delegate certain management activities to committees and management personnel, it cannot delegate authority to officiate at meetings.

Activities and affairs of a homeowners association shall be conducted by, or at the direction of the board of directors. This hierarchy is reinforced by statute, in that, unless a titleholder serves on the board, his or her control in that development is limited to a vote as a member of the association.

At the next board meeting, use your right to speak during the open forum and voice an objection on the record that the manager is “out of line” and request the admonition be entered into the official meeting minutes. The manager’s actions are not just a breach of protocol and parliamentary procedure; managers do not have legal authority to conduct board meetings and they are not to interfere with the business of the board and the association.

Because board meeting minutes are prima facie, if the manager is noted in the minutes as conducting the official business of the association this could have wide-reaching implications. If association interests were left in the hands of an unqualified vendor, indemnification may be negated, depending on the terms of insurance, business conducted during all those meetings may be void and, in the event of a lawsuit, the association would be at a disadvantage, if not handicapped, in proving the board members acted in good faith and in the best interests of the association and its titleholders.

Homeowner association meetings are required, and to some extent regulated, by statute and case law.  Whether your board directors are merely lazy or do not understand how association meetings are required to take place does not abrogate them of their duties or otherwise allow an inept vendor to assume their obligations.

Association board meetings are a time for owners to witness how the business of their association is conducted and to discuss the governance, maintenance, and financial stability of their assets. Association meetings should be conducted in accordance with a recognized system of parliamentary procedure or any parliamentary procedures the association may adopt. This corporate meeting structure ensures an orderly and efficient proceeding. If there is confusion about the rules and logistics of these meetings the board’s questions are better put to the association’s counsel than the manager.

2 Responses to Conducting Board of Directors Meetings

  1. Ray Keeton says:

    Could you please confirm that the comments about non-delegable duties applies in Arizona.

    Like

What are your thoughts?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s