Disciplining/Censuring Directors

Just signed up today, but surfing around, haven't found this topic & don't see a way to search for a particular topic.

I'm new as board president, but have served for a few years as director. At our next ES, two (of seven) directors need some kind of sanction, rebuke, or admonition, one for breach of confidentiality, i,e, revealing ES activities to a non-director. The 2nd for shouting and cursing at a homeowner in ES during a hearing. Really. Both have acknowledged their misconduct, which occurred at or since our last ES nearly a month ago.

I'd like the board somehow to avoid a formal "censure," as per Robert's, and there's nothing in our docs about discipline of directors. I simply want their acknowledgements of misconduct entered into the ES minutes as well as the name and address of the owner involved. I guess we'd also wan the board to direct each to refrain from such behavior in the future. Both cases involve the same owner and it's apparently important to protect our HOA's assets by warding off, if possible, liability issues involving an owner ()who already has threatened to sue the HOA.

What do you all advise?? Thank you, carol

A private one-on-one between the president and those "offending" officers should take place. That's warning number 1.

If it happens again, then the president needs to make it official with a letter, and this should be on file somewhere. Warning number 2

If it happens again, then remove the person. There is a 2 step documented trail of evidence indicating that this person doesn not have the temperment to be a board member and was warned about his/her behavior.

PS It does not matter WHERE or when this behavior happens. Some people just don't have tact and should not be serving on a board.

Thanks for your reply, Ann.

In Calif., and also per our HOA's bylaws, hearings concerning alleged owner violations of the rules are held in Ex. Sess. In the letter to owners, they're informed that the hearing may be held during a regular (or open) meeting if they choose. No owner has chosen that option. So, yes, the hearing in question was definitely legal.

Directors here sign a Commitment Pledge and also a Code of Ethics annually in November, both of which spell out clearly the requirement to keep Ex. Sess. matters confidential.

There is another doc, which we don't sign, that points out the need to maintain a professional demeanor and to put personal issues aside. Unrelated to the alleged violation at the hearing under discussion, and previously unknown to directors, the director who shouted and swore had taken personally the owner's tenant's alleged violation of a different rule. This was not on the agenda. This is why the director's outburst at the Ex. Sess. was such a shock. I have seen this director ready to explode in previous situations, but s/he managed to retain self control.

Also in Calif. and in our governing docs, there's no requirement to use Robert's so far as I can tell. Based on some sources, including davis-sterling.com->index-> "Censure," a director's "unruly meeting" conduct is reason for some sort of discipline.

Whatever we do at the next Ex. Sess apparently is a "personnel" matter viz. directors & committee chairs/members and may properly be discussed in Ex. Sess.

(I used "ES" because I'd seen it elsewhere on this site and thought it was a common acronym.)

I like your approach very much, Susan. (One director is an officer, the other is not.) I think that it will serve two important purposes. 1. Letting the two directors know that their behavior is unacceptable. 2. Placing the directors' apologies in the Ex. Sess. minutes and directors instructions to them to refrain from such behavior in the future, which will (I hope!) help protect our Associations' assets from liability issues. The latter is the first duty of all directors.

Can you give me the source of this 3-step process? I think I ran into it long ago, but have no idea where!

I met privately with each director and one other director to hear each director's side of the story. Each acknowledged the behavior as improper. I informed them that we must discuss this in Ex. Sess. (as briefly as possible) so that there is a record in the minutes. As I wrote earlier, both instances of improper conduct involved the same homeowner, who's threatened to sue us for repeatedly calling him to hearings for his tenants' rules violations. The owner lived here for many years and the breach of confidentiality may have reached him.

Any other advice from anyone would be great!!

FYI: from Ct statute

"c) Meetings of the association shall be conducted in accordance with the most recent edition of Roberts' Rules of Order Newly Revised unless (1) the declaration, bylaws or other law otherwise provides, or (2) two-thirds of the votes allocated to owners present at the meeting are cast to suspend those rules."

Hi Carol:

That is probably because there is no CA Civil Code for this situation. It does refer to Corporation Code regarding removal of directors by court:
http://www.davis-stirling.com/MainMenu/Statutes/CorporationsCode7223/tabid/1147/Default.aspx

The only way censure or removal would potentially fall under any Civil Code would be for the following infractions:
1. breach of confidences
2. breach of fiduciary duties
3. undisclosed conflicts of interest

Or these other removal methods for cause as stated here:
http://www.davis-stirling.com/MainMenu/MainIndex/RemovalbytheBoard/tabid/1344/Default.aspx

Just wanting to censure is not necessarily a civil matter.

Posted By RobW on 02/21/2011 1:12 PM Couple of things to throw in...

First of all, we are talking about disruptive behavior at meetings which, if allowed to continue without objection, may make the rest of the Board members liable for any damages that result. If your Board does nothing more than censure the two Directors, that action will be recorded in the minugtes, and you are covered.

One of the two Directors is an officer. In California, an officer may be removed from office by the Board, with or without cause, since the Board appointed the person to that office in the first place. That would probably be sufficient "punishment" for that particular director.

Finally, any Director may be recalled by the membership. Any member may start recall proceedings by simply drafting a petition for a special meeting, and it only requires the signatures of 5% of the members in the Association.

Rob

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Thank you, Rob. I don't believe that the rest of the Board has any desire to remove the one offender from office, let alone either director from the board. I entirely agree with your first paragraph although we won't be using the language of censure and will take the 3-step discipline approach suggested by Susan instead. Everyone on this site has been really useful in helping me think this through.

Thanks, but my wife is the awesome one - she's gone a lot deeper into this whole thing than I ever did. I tended to read my Board package the day of the meeting, and then "wing it" through the meetings. My wife is truly dedicated, and the Board elects her President every year. She doesn't really enjoy being President, either, but let's just say her involvement - and mine as the Architectural Control Committee chair - are a product of enlightened self-interest.

But let me explain why a President should never have private meetings about anything serious. First of all, there is no "paper trail" without minutes, minutes are kept at meetings, and meetings are defined very narrowly in California: membership meetings, Board meetings, Special meetings, Executive Session meetings, Emergency meetings and Committee meetings. (Did I leave anything out? Sorry, tired.)

Take my advice and you will not regret it: Don't make the mistake of thinking that as President, you have some sort of power. The Davis-Stirling Act, the California Civil Code, the Corporate Code and your Bylaws define your powers, and they are very limited indeed.

In essence, as the President, you only have the power to obligate yourself to serve people who may not appreciate your service. You have the power to burden yourself with worry and concern, never really having certainty that you (a) know what's really going on, (b) know exactly what you should be doing, (c) know who is really your friend, and who might appear to be your friend until your butt is in a wringer, and (d) whether your Board is going to back you when you stick your neck out a little too far.

As President, you have no real decision-making authority, either, and trust me - you don't want that authority. It's not a perk, and there's no compensation, and no matter what you do, you will piss off somebody, no matter how much you may toss and turn at night in angst over some issue.

As president, you have only one ace up your sleeve (other than your own honesty, integrity, knowledge and experience), and that's your Board. Your job is to steer the good ship HOA, and your Board is your trusty crew. But like a pirate ship of old, your crew can make or break you.

If you think you know what ought to be done, poll your crew. If you have their support, then do whatever you need to do, but do it together. This problem with two Directors going rogue is troublesome, but it's a Board problem - it's not your problem. Hold an executive session meeting and get this stuff on the table. You don't need to take any action at all in a meeting that requires a vote, but you can talk about the possible actions the Board can take if things don't get fixed. Your job, as President, is simply to conduct the meeting - not guide it to meet your own hidden agenda.

And that is my final point: The real reason you don't want to have private meetings with rogue or disruptive Directors or officers is that there should be nothing private or secret done when it comes to discussions the Board has with itself. The members elected you, and the members have every right to know what is going on - especially in a situation where the members already know that certain Directors have misbehaved. And when these meetings take place, minutes are taken, and the members know that their best interests are being taken care of by the people they elected to represent them.

Trust in your Board, and make damned sure that whatever you do, you are doing it solidly within the authority granted to you by the law and by your governing documents.

Rant finished.

Rob

Maybe so, Susan, but I'm not talking about warnings. The President can call a meeting of the Board to do some brainstorming about ethics, expectations, goals, and what constitutes professional behavior. That way, the entire Board gets to participate, and the President can demonstrate his or her leadership style. Other than the President's power of persuasion, peer pressure is the most powerful force that can be exerted on individual Directors to self-correct.

In this case, I don't know if the Board ever met for orientation, but in California, it's covered in our Civil Code, and all Board Presidents might want to revisit it. There's no reason it can't be held more than once, anyway:

Board Orientation. A "board orientation" is an informational meeting for new boards where directors meet with the association's management and/or legal counsel to (i) learn about the board's duties, (ii) receive an update on legal issues, and (iii) receive historical background information. As such, a board orientation does not require notice to the membership and may be closed. Civil Code 1363.05.

Rob

Truly, Rob, despite my ignorance about director discipline, I'm quite knowledgable about CA Civil Code, Corporations Code and our HOA's bylaws, CC&Rs, Rules & Regs, etc. Started studying all of these with others before I ran for the board 4 years ago. Some of us coalesced to get rid of an incompetent, highly secretive, rogue board. Two of us were elected and had to resort to all kinds of procedural moves (the then board know nothing about any of the above, i.e., bylaws, etc.) to induce any improvement from the remaining 5, and a new Prop. Mgr., who was hostile to "Tim" & me. A year later, two others with our viewpoint were elected, we got a new, excellent property mgr. and we were well on our way to becoming a functional and productive board, which we still are today. We generally all row in the same direction.

I really do know, too, the limitations to the President's authority and do not mind at all as I'd like to see all directors be active members of the board. I might add that I did not seek the office of President and begged two others to take the job. No dice. I felt I was best suited in a different office that I'd held for 3 years.

I did consult with our V.P. and our vey experienced Prop. Mgr. before I & one other met with each miscreant.

Btw, the breach of confidence is unknown to other directors (except the V.P.) until we meet in Ex. Sess. The disruptive shouting at an owner also isn't known to 2 directors who missed that meeting. (I think a different poster mentioned something about all directors already knowing about the infractions)

We do have an annual orientation put on by our mgmt. co., which was just held in mid-Jan./11.

I'm going to suggest the formation of an ad hoc Executive Committee to recommend to the board some guidelines for director discipline. Hope I get some takers.

Thank you again, rob, for your wise counsel. Carol