MC Action Re Deadlocked Board

NpS (Pennsylvania)
Posts: 4,216

Posted:

A few years ago, we had a deadlocked board. Same 2-2 split on all issues. 5th board member never wanted to be the deciding vote. Nothing of substance ever accomplished.

I was not on the board at the time, but I was influential in bringing in the MC. Called him several times to tell him that things couldn't continue this way. Asked him to step in and get things moving. He said that wasn't his responsibility.

To all our MCs and PMs on this forum, I'm wondering how you would have handled it.

Sikubali jukumu. Read all posts at your own risk.

RichardP13 (California)
Posts: 3,868

Posted:

You walk a fine line as a PM or MC.

I think what I would have done is bring all five individuals to a meeting, have them either work out their differences for the overall betterment of the community or stress to them to get someone elected with similar goals as theirs.

In an open meeting state, as a board member, you might campaign to get enough members to a meeting to show them why things are getting stuck. In a closed meeting states as PA, not sure that works.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

NPS

Your 5th BOD members needs a "talking to" or a swift kick in the a$$. With position/rank, comes responsibility.

SheliaH (Indiana)
Posts: 6,964

Posted:

What John said - voting on Association issues is a primary reason one serves on the board. This board member sounds like a coward because he/she doesn't want to be criticized if the outcome is negative. However, if you review the materials related to the issue and ask questions and apply careful thought to the issue, you can vote with a clear conscious. Sure, the decision may turn out to be a bad one, but you fix it, learn from it and move on. That's another essential part of being a board member.

In any case, it isn't the property manager's place to force him/her to vote, so I hope other owners in this community are paying attention and asking questions (may be time for them to vote this guy/gal out)

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

KerryL1 (California)
Posts: 14,550

Posted:

I'm with JohnC & Sheila. As directors, we have a fiduciary responsibility TO decide. Directors themselves should talk with such a person in private and inform him that his JOB is to make decisions. I'd go so far as to embarrass him/her at an open meeting if s/he continued to abstain.

We had one director who sometimes abstained and always proudly smirked--"that's like a no vote." Grr.

BobD4 (up north)
Posts: 1,002

Posted:

Quote:

Posted By NpS on 12/30/2015 9:44 AM
a deadlocked board. . . Same 2-2 split on all issues. 5th board member never wanted to be the deciding vote. Nothing of substance ever accomplished.

Asked (manager) to step in and get things moving. He said that wasn't his responsibility. To all our MCs and PMs on this forum, I'm wondering how you would have handled it.

Where the deadlocks prevent or handicap an action or restraint lawfully required by state law , or even merely by the governance documents, a manager should be actively addressing whatever lack of competence, knowledge, good faith whatever if such are the reasons. But maybe they're not the reasons.

Some managers may not have the skillsets nor influence on their Board clients, to do so effectively anyway. The alternative perhaps should be trying to persuade the Board clients to listen to competent external advice eg a competent legal professional.

That said, I see NO obligation - and lots of downsides - for the agent to otherwise dare trying to get involved in the internal dynamics of the principals.

With respect, I further see no particular blameworthiness on the part of the non-aligned Director.

Not the property manager but the Board collectively shares a duty to the owners/stakeholders, a duty perhaps focussed a little heavier on whomever the Directors chose as President. The owners / stakeholders chose or tolerate this mix of folks on the Board, and should be the remedy.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By BobD4 on 12/30/2015 4:58 PM

Posted By NpS on 12/30/2015 9:44 AM
a deadlocked board. . . Same 2-2 split on all issues. 5th board member never wanted to be the deciding vote. Nothing of substance ever accomplished.

Asked (manager) to step in and get things moving. He said that wasn't his responsibility. To all our MCs and PMs on this forum, I'm wondering how you would have handled it.

Where the deadlocks prevent or handicap an action or restraint lawfully required by state law , or even merely by the governance documents, a manager should be actively addressing whatever lack of competence, knowledge, good faith whatever if such are the reasons. But maybe they're not the reasons.

Some managers may not have the skillsets nor influence on their Board clients, to do so effectively anyway. The alternative perhaps should be trying to persuade the Board clients to listen to competent external advice eg a competent legal professional.

That said, I see NO obligation - and lots of downsides - for the agent to otherwise dare trying to get involved in the internal dynamics of the principals.

With respect, I further see no particular blameworthiness on the part of the non-aligned Director.

Not the property manager but the Board collectively shares a duty to the owners/stakeholders, a duty perhaps focussed a little heavier on whomever the Directors chose as President. The owners / stakeholders chose or tolerate this mix of folks on the Board, and should be the remedy.

Interesting comments Bob. Like you, I am surprised at negative comments about 5th board member. She had volunteered from the floor at annual meeting because no one else was running. No prior understanding of what her responsibilities would be. Just thought she was being helpful. Never thought she would be in the hot seat, and didn't have it in her to be the final decider.

MC had the skill set and influence. I think he decided to sit on the sidelines because his contract with our HOA was safest as long as the board was deadlocked.

Lawyer would not have added anything other than expense.

Prez doesn't really carry any additional weight. Still only 1 of 5 votes.

When 5th board member ran for re-election, I ran against her. Only time in more than a dozen years that we had more candidates than open slots.

Sikubali jukumu. Read all posts at your own risk.

LarryB13 (Arizona)
Posts: 4,099

Posted:

I am with the hard-liners on this.

The fifth board member did no one any favors by volunteering for a position on the board when she knew nothing about the job. I am a firm believer that if you raise your hand you are telling the owners that you are ready, willing, and able to perform the tasks required of a board member. That, of course, requires making some hard choices from time to time.

PitA
Posts: 1,416

Posted:

Never thought she would be in the hot seat, and didn't have it in her to be the final decider.

Have her vote FIRST

CyrstalB (Maryland)
Posts: 457

Posted:

Can the votes be taken by secret ballot or is that against the rules? If not then the rest of the board should vote to remove her if the docs allow for that and put someone in who will.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Thanks for your thoughts Pita and Crystal. But as Bob said, always 2-2 with her and always 2-2 without her. As if she perpetually abstained. And other 4 couldn't get past their 2 against 2 hostility.

Sikubali jukumu. Read all posts at your own risk.

BobD4 (up north)
Posts: 1,002

Posted:

Great comment by CrystalB Maine about secret ballots for the faint of heart.

But would such itself have required a Board vote ?

Did she have uncertainties about using the bathroom ? Would this - possibly very ethical - un-decisive Director have run afoul of ethics by-laws ?

Anyway from the Great Igloo Happy New Year to all . . .

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By CyrstalB on 12/31/2015 7:08 AM
Can the votes be taken by secret ballot or is that against the rules? If not then the rest of the board should vote to remove her if the docs allow for that and put someone in who will.

Some states prohibit directors from voting via secret ballot. Most states prohibit a board from kicking members out.

CyrstalB (Maryland)
Posts: 457

Posted:

Yes Geno, you are right, one must check their own documents and state code and corporate law if applicable to see if anyone's suggestions on this forum can apply.