Discussion Forum Follow-Up: Reining . . .
Discussion Forum Follow-Up: Reining in Bullies on Your HOA Board
One of your peers has become drunk on power and a bully. It's simple. When one board member takes the job too seriously, the rest of the board must step in.
The problem is all too real. A reader on the HOAleader.com discussion board asks: "I am on the board of directors of our HOA, but the president is just running wild and not following any of the bylaws or CC&Rs and is holding private meetings with the board members she likes and ignores the rest of us. This is an older group of people, so they don't want to be bothered with meetings or anything upsetting, so she is getting away with all of it. How can she be stopped? She holds executive meetings and never does any minutes. We're about six months behind on board minutes, and she's spending money without any authorization. What can we do to stop this? Can it be reported to the state?"
Here, we provide tips for handling secretive, power-hungry board member tactfully yet effectively.
Remove the Offender from an Officer Position
James R. McCormick Jr., a partner at Peters & Freedman LLP in Encinitas, Calif., who represents associations, is currently advising two associations on the issue of bully board members. "I had a meeting yesterday with a board with a member who has physically grabbed other board members," he says. "And I have a meeting tonight with a board with a similar situation. It's really tough."
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McCormick says bullies come in two types. "One will actually take action, and the other, who is usually more prevalent, will back down when confronted," he says. "But you don't know going into it what type of person you're dealing with. In my situation, I've never met the people, so I don't know which they are. We can try to cut them out of board activities, but I don't know how they'll react."
Therefore, you must tread carefully. Check your state law and governing documents. If they permit, your first option should be to use the power that many boards don't realize they often have—knocking the board member down a post from an officer to a mere director position.
"In Florida, the board of directors determines who serves as officers," says Lisa A. Magill, a shareholder and association attorney at Becker & Poliakoff PA in Fort Lauderdale, Fla. "If you have a president, treasurer, or other officers going rogue, you can always remove them from office. They'd be removed from office but still remain a director. So if they're signing contracts or issuing purchase orders, they won't have that authority."
That's also true in Arizona. "In Arizona, our ability to remove directors is dictated by state statute, but you can remove them from an officer position," says Kristen L. Rosenbeck, a partner at the Mulcahy Law Firm PC in Phoenix, which represents associations. "That power depends on your governing documents, but 99 percent of the time, the documents permit the board to remove the officer from the position. Maybe they need to have that position removed and just be board members. Sometimes that puts them into place."
California's rules are similar. "In California, 99 percent of the time, officer positions can be reorganized," McCormick explains. "So if you have one person who's running amok, you can say, 'I'd like to add this to the agenda: You'll no longer be president; you'll be in a nonofficer position because you're violating the association's documents.' Sometimes they're embarrassed and resign, or they continue on and you have to do other things."
Stripping an officer of his title may not resolve your problem. "That helps, but it doesn't help all the way if the board member has relationships in the community and the ability to convince people he has authority," explains Magill. "In Florida you can recall board members, but that requires action by the majority of membership. If you have a lot of absentee owners, it could be difficult."
Magill has pursued other avenues with clients. "Generally the association has a specific list of vendors it deals with," she explains. "If we have a problem with one board member taking unauthorized actions, I have the board adopt a resolution stating who's authorized to act on behalf of the corporation and that no other board member has any authority to act on that issue. That resolution doesn't have to be negative. You're not saying, 'John Jones isn't authorized.' You're saying, 'No one but this person has the authorization.' Then I send that resolution to the vendors we deal with on a regular basis and tell them, 'If John calls you, tell him you need to speak to Tom.' That's pretty harsh, but you have to control the conduct of your board because you're going to be responsible, and the association is going to be responsible."
What if board members are blabbing about confidential association business? "If they're out talking about for-board-ears-only matters, consider creating a confidentially agreement that puts their fiduciary duties and what's required of them in writing," suggests Rosenbeck. "You're essentially saying, 'You're a board member and have duties, and we'll put those in writing so they're not just a figment of the law.' Some boards also ask their attorney to talk to the board about their duties and obligations. Sometimes having that professional role put in front of them is enough."
More Advice for Our Reader
If that doesn't work for our reader, McCormick has more advice. "Deal with this more on a political than a legal level," he advises. "There are laws that permit the association to file a lawsuit to remove a director for dishonesty or fraudulent activities, but usually the actions don't rise to that level—and do you want to get involved in a $30,000-$40,000 lawsuit?
"Make it political," McCormick says. "You can isolate her, remove her from her president post, or make it impossible for her to be reelected. Start with a code of ethics. I tell boards, 'I can draft a code of ethics that's very comprehensive. Present it to the board and have the board vote on it.' Either she's going to say it's a good idea and sign it, which means she's agreeing to comply or voluntarily resign, and you have an agreement you can enforce."
However, bullies often won't sign, McCormick says. "Then take this document and send a letter to the membership stating, 'The board reviewed this code of ethics that will apply to all directors and asked all to sign it. Four signed it, and Director Difficult didn't,'" says McCormick. "Owners will look at it and say, 'Why didn't this director sign it? Why wouldn't she sign it?'"
That should be your first shot across the bow, says McCormick. If the behavior doesn't stop, consider recalling the director and tie the refusal to sign the code of ethics into all the board member's actions that violate your governing documents. "Don't slander anyone, but throw the issue to your owners by stating, 'This person isn't acting in the best interest of the association, and we support the recall,'" says McCormick. "Or if the member is up for reelection, state, 'Please don't vote for this person because we believe she's not acting in the best interest of the association.'"
Stand Up for Yourself and the Association
If you're being pushed around, remember that you have just as much authority as the pusher. "Most often, it's the president doing this," says Rosenbeck. "My first response is, 'The president is a board member like anybody else. Your vote is equal to the president's vote.' Board members really need to stand up and communicate and put that board member back into place."
No question: You have a tough job. "Being a board member is sometimes very difficult," says Magill. "You have to make difficult decisions, levy assessments, and deal with confrontations with vendors, other board members, and owners. It's difficult for board members to address powerful board members. But if you can get together and try to do things in a way that you're not singling one person out, you're in a little better position."