Board Member Sharing Confidential Into

Hi,
I am a member of a 5 person HOA board.

4 of the board members believe that the 5th board member is sharing information with the community. Certain members of the community, know a little more that they should.

The reason the information being shared, is that board member #5 is trying to take over the board with their friends. We have heard from a few people that board member #5 has a personal agenda to remove the property manager, stop issuing fines for rules violations and award contracts to her community of friends.

We are a racially diverse board and want to keep our property managed properly and not by a few people with only special interests only.

What is the best way to approach the situation?

We can throw #5 off the board, but that will only make situation worse when the elections happen.

Your meaning is clear, Frank: Votes and discussions in executive session seem to be known by non-directors.

Let me ask you this: Does NJ have open meeting legislation? or is everything a board discusses done in private--behind cloud doors?

And: how can you be sure that #5 is sharing confidential info? Can you give an example?

Finally, unless your bylaws or state laws say so, your cannot "throw #5 off the board." If she was elected by the membership, only they can "recall" him.

There is a solution that could work well in your case, but we need to know more first.

Just out of curiosity, what die is your HOA? condos detached homes, or ??

Sorry, what SIZE is your HOA? "cloud" should read "closed."

I should have written a reply more clearly: Is #5 sharing confidential information. This would include who voted for or against whatever topic in executive session. Votes in open board meetings are rarely, of course, confidential.

Discussions, evaluations voting for raises re: mgmt. companies for instance often are legitimately conducted in closed or executive session as they are personnel matters.

The way to combat something like this is to publish the information to the membership as a Board. This way, everyone knows everything. The second thing you need to do is gather support now so when elections do come, you can make sure those with personal agendas are not elected or, at the very least, do not control the votes of the Board.

Kerry,

Until Frank responds to this thread again, we don't know what the information is that is being shared.

Perhaps it's just work sessions vs. executive sessions (as NJ allows work sessions and conferences where no decisions are made to be closed to the membership). Work sessions typically are not of a confidential nature.

Frank certainly makes it sound as if the info is confidential. I can't imagine that "work sessions" info would be of a confidential nature.

Perhaps he is mistaken about what should be kept confidential and what may be shared. We shall see...I hope.

One of our BOD members IS sharing information from a closed executive meeting. Facts that could only have come from this meeting are being published on social media by members who can only have gotten them from the said BOD member. We had another BOD member who shared confidential legal information and resigned. What can be done about the existing member who the rest of the BOD can no longer trust?

Wow, Tim, what is it you see that suggests that Frank & Alex are the same person?? I simply don't know these tricks!!

I think the discussions in ES may be held confidential, but there is requirement that they be confidential

Whoops - sorry - replied to wrong thread. No Frank and I are different people in different states. What can be done then when the rest of the BOD knows that one person cannot keep confidential information to themselves? It is necessary sometimes to discuss such information - legal, personnel issues - but the rest of the BOD know that as soon as the meeting is over the information will be spread into the Community. Let me correct - a faction of the Community that is trying to undercut the BOD.

There are a couple of things that can be done.

1) Don't discuss anything you are concerned about getting out to the membership (as you know that this will likely happen).

2) Have your attorney pay a visit to the Association, or simply write a legal opinion, on the ramifications, to the Association as a whole and to the individual directly, of a Director's failure to maintain confidentiality. Then have everyone sign a document indicating that they have been made aware of the Attorney's opinion.

NOW - To be realistic, a lot of what goes on in ES can very easily be discussed in open session with a few exceptions. For example:

Contract bids can be discussed by identifying the contractors as A,B,C & D and having the main point of contact draft a comparison chart between all the bids.

Hearings for covenant infractions are allowed to be in open session. We actually give the individual the choice of executive session or open sessions. Keep in mind most Associations require that Decisions be made in open session anyway. Therefore, the only thing that is happening in ES is the explanation and discussion of the issue.

Legal issues can be minimized by appointing one or two individuals to be the liaison with the attorney and report to the Board. The report can normally be generalized and summarized without mentioning strategy, individuals or specifics yet get the message across of what is happening. This will also keep that one or two individuals who can't keep a secret from knowing everything about the issue. They will of course know some of the details but not all of the details (at least not after the Board votes to proceed with legal action).

Liability issues will likely need to be discussed in executive session. However, these once again can be minimized by assigning one or two individuals to investigate and/or obtain a legal opinion and report back to the board. Heck, most liability issues everyone likely knows about anyway. Our Association has no problem discussing these in open sessions. However, we haven't had to deal with major liability issues within our Association (knock on wood).

Employee issues will need to be discussed in executive session. There are privacy concerns associated with employees (which is why I suggested the letter from the attorney).

So, without knowing the details of what is being released, and to answer Kerry's earlier question, you need to keep in mind that if executive session details are already being released, you might as well go ahead and release them to everyone - as this will at least minimize the advantage one group thinks they have by knowing these things. Keep in mind, you can release info about an executive session without releasing all the details.

Say, Glen, I definitely know that nothing that occurs in ES should be shared with non-directors except, sometimes, results announced in an open meeting and written into its minutes., e.g.: "An owner was fined $100 for a second violation of loud partying"; "After the Board interviewed three firms, it awarded the contact to xxx Landscapers."

There are a couple of things that can be done.

Here are my ideas too, which i write after Tim's replies.

Tim: "1) Don't discuss anything you are concerned about getting out to the membership (as you know that this will likely happen). "

Kerry: This can be impossible. We are tomorrow, for instance, interviewing three people to replace our PM. Their names, resumes, etc., are completely confidential and only the name of our selection will be named to the membership. Names of owners called to hearings, who never yet have wanted to make their case in an open meeting, cannot be revealed.

Tim: "2) Have your attorney pay a visit to the Association, or simply write a legal opinion, on the ramifications, to the Association as a whole and to the individual directly, of a Director's failure to maintain confidentiality. Then have everyone sign a document indicating that they have been made aware of the Attorney's opinion."

Kerry: This is a good idea. If you have a PM, s/he can wrote the same thing without charging your HOA. In addition, the other directors all can direct the bigmouth via their vote in ES to refrain from revealing confidential matters. This is recorded in the ES minutes. If the director doesn't comply, the others directors can censure the leaker. I believe a censure CAN take place in an open meeting, but you'd better check.

Tim: "NOW - To be realistic, a lot of what goes on in ES can very easily be discussed in open session with a few exceptions. For example:
Contract bids can be discussed by identifying the contractors as A,B,C & D and having the main point of contact draft a comparison chart between all the bids."
Kerry: True in CA too, but we generally don't do this for big contracts, just our smaller ones. We have 20 contracts.

Tim: "Hearings for covenant infractions are allowed to be in open session. We actually give the individual the choice of executive session or open sessions. Keep in mind most Associations require that Decisions be made in open session anyway. Therefore, the only thing that is happening in ES is the explanation and discussion of the issue."
Kerry: In the 8+ years I've been on the board, no owner has chosen to plead his/her case in an open meeting. There is no requirement in CA to state our decision in open meetings, but we do in general terms.

Tim: "Legal issues can be minimized by appointing one or two individuals to be the liaison with the attorney and report to the Board. The report can normally be generalized and summarized without mentioning strategy, individuals or specifics yet get the message across of what is happening. This will also keep that one or two individuals who can't keep a secret from knowing everything about the issue. They will of course know some of the details but not all of the details (at least not after the Board votes to proceed with legal action)."

Kerry: Here is where you & might I part ways. The Board can elect an executive committee that includes all directors except for the blabber. Alex (and maybe Frank?) might check on executive committees at davis-stirling.com, which is complied by CA HOA attorneys. But executive committees are not limited to CA.

Tim: "Employee issues will need to be discussed in executive session. There are privacy concerns associated with employees (which is why I suggested the letter from the attorney). "

Kerry: Again the executive committee can deal with these completely leaving out the flawed director. Because we have here 17 onsite staff, this type of topic isn't unusual for us and confidentiality is crucial for obvious reasons.

What you've described, JohnC, is not confidential information. In open-meeting states the topic of even considering the possibility of changes in the dues would have to be done in an open meeting.

Mark, while perhaps not illegal, there can be legal consequences for revealing confidential matters. If the Board does not censure the gabby director or keep him/her out of confidential discussions & votes, the entire Board MIGHT be liable.

"Violation of Confidentiality. Directors who violate the confidential nature of information gained in executive session are subject to censure, and personal liability for their behavior, i.e., they lose the protections of the Business Judgment Rule."

Read more: Executive Session Defined http://www.davis-stirling.com/tabid/1769/Default.aspx#ixzz3VF2xMNXy
from Davis-Stirling.com by Adams Kessler PLC.

This site recommends a Code of Ethics, which our Board has, and confidentiality is one of the first "rules."

Kerry

The OP never said anything about "Executive Session" info nor has he followed up to qualify when asked.

So you would recommend interviewing CAM/GM candidates in ES. Can others please comment as to what is done in their HOAs? I believe it is a good idea since there are confidentiality issue regarding salary, references etc. of course in our BOD we do already have confidentiality issues with the one member.

Hi,
The board member has shared the board package with members of the community (fines, board notes, contracts, bank information).

Some of the information in the package come out in conservations with homeowners and at our annual board meeting for homeowners.

Frank

Alex we recently went through interviewing property management companies, none of the interviewing process was done in executive session. As far as interviewing a particular CAM, if you have a PM keep in mind that you are paying the property management company, they are paying the CAM, salary of a CAM is really not the boards concern in this case.
I am wondering if the issue is your board is not keeping the owners informed and most everything is being kept as if it was national security. Maybe you ought to get a firm reading from your lawyers on what is limited to discussion in an executive session and what should be in an open board meeting, after all remember you folks were elected to represent your community.

Yes, Alex, I do rec interviewing the MC or individual PMs in ex. sess. For the latter, that we'll do late today, the position is for a full-time onsite PM who supervises our 17 onsite staffers (tho' they also have their own off-site sups who visit). We have, as mentioned, an onsite F-T Asst. mgr. too.

The PM position involves a lot of complexities because of our high rise, twin tower premises. Many vends, etc. who aren't onsite.

Our MC's CEO will be present. We will, Gregg, talk about salary with the MC CEO. The MC does write the check, but, obviously we H/Os pay for the PM out of our dues. We'll also ask some pretty tough questions about the approach to dealing with delinquencies, renters, parking issues, alleged violations. We'll ask, I'm sure, about priorities, Knowing the nuances of our mechanical & plumbing systems, we'll talk about those matters which, I know from experience leave owners rolling their eye.

Owner-occupants are interested in only a few things: Will the PM be "nice" to me, responsive when water comes into my unit, and kind if my payment is late. Candidates' responses to us, their demeanor, etc. will be shaped in certain ways if H/Os are present--it's only natural. We directors will get a better and fuller picture of each candidate without the distraction of 20-30 H/Os who we must by law allow to ask questions at an open forum.

Now, HOAs with part-time PMs who manage several accounts and only stop by to vista once a week, or less, may not need this privacy that works best for our HOA.

I now have reviewed two resumes for our new onsite F-T PM. (The 3rd dropped out). One of the candidates worked for a major MC in our urban area for several years, but does not list anyone from that firm on her reference list. I certainly will ask her about that and also about why she left that company not very long ago.

I'd be reluctant to ask that in front of H/Os as it may be very awkward topic that she'd have trouble answering. Now, our MC's CEO has kept her in the pool of two and perhaps I'll learn a very logical reason why there's this gap in her resume. But I'm glad we both can be forthright in ES.

And Tim, finally, about legal issues in ES. We sometimes have legal questions emerge in open meetings or in ES too. Our President is our liaison with our HOA attorney, so she and our PM phone (free) him for his opinion if simple, or he writes an opinion if complicated. The board approves whether or not to contact the attorney.

We haven't had a big, complicated confidential issue to discuss in ES that we'd want to refer to our attorney since way back in our construction defects days. Our defect attorney met with the Board a lot and many owners were still cozy with our developer, who had offices very nearby. Confidentiality was absolutely crucial for strategic reasons, and I'm certain we'd have formed an executive committee if we had a mouthy director.

Sure an attorney's letter to the board about confidentiality would carry more weight than a PM's, but one from the PM or MC could be effective if the latter is well-respected, etc. In some HOAs, that it'd be free does matter, and if the PM approach did not work, an attorney could later be paid to write such a letter or even meet twith the board.

Honestly I wonder how the information that board member #5 had all those secret plans? Also I have to wonder what on earth the "racially diverse board" reference had to do with any confidentiality issue?

Sounds like there is a lot more going on there, just sayin.

Kerry

Charge (dollar) per door is not a billing method but it is a commonly used expression among management companies. As an example, one could call a local MC and describe their association. Typically they will be given a "rough quote" of $x-y per door, per month especially if the MC is familiar with your type(s) building and their location.

The suggestion that the Attorney re-enforce with a letter Board Confidentiality is a great idea. We will see how this one works out for us. Thank you everyone for your suggestions.

Alex, please keep us updated.

Good luck,

Tim