- Category: Board of Directors
Let's start with the basics. Every board has both directors and officers, and those roles are different. “Typically, the association membership elects the board of directors, and the board elects or appoints its officers,” explains Nancy T. Polomis, a partner at Hellmuth & Johnson PLLC in Eden Prairie, Minn., who advises homeowners associations.
Who can serve as a director or officer? The answer is controlled by an association's governing documents. “That really depends on what the association's bylaws say,” says Polomis. “Some will allow nonassociation members to be directors and/or to be officers. Some will restrict board membership to association members. Some will restrict officers to those who are members of the board of directors, which means the officers are usually also directors—for example, somebody on the board is also president— but that doesn't have to be the case. You could pull in somebody who's not on the board to be president. But most times, associations don't do that because sensitive issues are discussed. Most require at least the president and treasurer to be members of the board of directors.”
Officers Play Two Roles
As a result, officers are typically serving in dual, concurrent roles. “The people who are running the show are wearing two different hats,” says Polomis. “They're wearing a hat as directors and making decisions in their capacity as directors. And they're wearing a separate hat as president, secretary, or other officer. The board may develop a budget and make decisions about whose decks are going to be repaired, and then it's the president
who signs off on the contract because the board has authorized the president to do that.”
Matt Zifrony, who advises homeowners and condo associations at Tripp Scott, a Ft. Lauderdale law firm, and who's also the president of a 3,000-home association, agrees that boards set the general direction for an association. “The board as a group meets once a month, sometimes less often and sometimes more often,” he says. “They make the big-picture decisions: „Should we enter into a new contract with [blank]? Should we enact new rules? Should we change our vendors?. They're meeting at a limited time period to make decisions.
“The president is more involved in the day-to-day activities of the community. There are instances where the board is less hands-on and gives the president authority by saying, „Look, president, you don't need to bring these
issues to the board. If you see a problem, you have the authority to handle it. I don't recommend that happen. I don't think it's in the best interest of the community, and I think it puts the president in harm.s way because people can question whether the president is acting in the association's best interest. I counsel that the board makes decisions.”
Directors can also often serve dual roles, explains Duane McPherson, division president at RealManage, a San Rafael, Calif., association management firm that oversees properties in Arizona, California, Colorado, Florida, Louisiana, Nevada, and Texas. “Regular board members can be liaisons to committees,” he says. “They can also volunteer for specific projects to help the board. Say the association has a road committee. A board member may either be on that committee or serve as chair of that committee.”
Whatever a director's day-to-day role, McPherson says one critical function of a director is to support the board. “Once a decision has been made by the board, one really important role for board members is to support that decision as long as it's been made in a democratic fashion,” he says. “They may have argued against the decision before it was made, but a good board member will always support board decisions. It's the best thing they can do for the association as a whole.”
Removing Officers and Directors
When it comes to removing officers and directors, there's often confusion. In most associations, members don't elect board officers, so they typically also can't remove officers, which is usually a surprise to members and even some directors.
“Most associations say an officer can be removed by the board at the board's discretion, and the director can be removed only by vote of membership of the entire association,” explains Polomis. “So the board could remove
somebody as an officer, but that person is still a director until the entire membership votes that person off the board.”
Polomis recently ran into exactly that situation. “We had a treasurer who really strongly disagreed with a decision the board had made,” she explains. “He said, „I don't want to hold the position of treasurer anymore.. So the board removed him as treasurer. I don't think anybody realized that—while he was not treasurer anymore—he still had a vote on the board. They thought by letting him out of being treasurer, they were removing him from the board.”