Serving on the Board of Directors for your Association presents itself with certain challenges. These can be compounded greatly simply because there is no user-guide or manual available to answer some of the fundamental questions one might have. This article is designed to help new and old Board members to understand exactly what it is they volunteered for, and to explain what that means.
What is a Board of Directors?
The Board of Directors (“Board”) of a homeowners’ association is the corporate policy-making body with authority over the maintenance, administration and financial well-being of the Association. In other words, the Board is made up of a group of volunteer members that oversee the Association.
What duties must the Board perform?
The Board must perform many duties on behalf of the Association. The following are some examples of the Board’s duties:
- Approve budgets and make decisions considering the budget.
- Authorize the appropriate assessment to fund the Association’s financial needs.
- Review the Association’s financials on a monthly basis.
- Structure committees of the Association, provide objectives and guidelines to the committees, and review and approve their work.
- Ensure that the Association is maintained as prescribed in the Association’s Governing Documents.
- Set policy and establish goals and objectives for the community.
Who are the Board members?
The position of a Board member is distinctly different than that of an Officer. However, in most Associations an individual will hold both positions concurrently. Recent legislation has imposed specific qualifications for the Board of Directors and provided permissive qualifications that the Association can adopt in its governing documents. Associations are now required to disqualify any individual candidate for election as a director that is not a member of the Association at the time of the nomination. However, there are additional guidelines regarding any property owned by an entity (such as a corporation or trust) and who may be appointed by that entity to run for election.
An association can have additional limited qualifications to serve on the Board. However, those qualifications must be adopted by the Association in its governing documents before they can be enforced.
How many Directors can be on the Board?
The number of directors allowed to be elected to the Board depends on what the Association’s governing documents prescribe. This information is generally established in the Association’s Articles of Incorporation and/or in the Association’s bylaws. It is common for the number of directors to be an odd number (i.e. 3, 5, or 7) in order to prevent any “dead-locked” decisions.
Who are the Officers?
Officers are generally members of the Board of Directors that are appointed during the Board’s organizational meeting to undertake certain additional responsibilities based on their Officer position. The Officer positions can be changed from time to time by a majority vote of the Board. There are several officer positions, the most common of which are the president, vice-president, secretary, and treasurer. Each Officer has specific responsibilities which are generally provided for in the Association’s bylaws.
All Board members hold equal status, regardless of their title, and each director has one vote, tied to its position as a director rather than an officer. Officer titles can be removed by a majority vote of the Board.