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JM16 (North Carolina)
Posts: 24
Posted:
We have an at large director who is making inflammatory social media statements including some that definitively states that our management agent and financial accounting partner has major accounting issues. None of which has any basis in fact. We currently have no code of ethics and this same board member has refused to sign any during any such discussions.

We're concerned over the potential of being sued for libel or slander due to this directors statements. Additionally, we're concerned that the public statements are in clear conflict to their fiduciary duties as a member of the board.

How would you handle in this instance?
KerryL1 (California)
Posts: 14,550
Posted:
Are you on the Board, JM?

I'm sure others will come up with better replies, but I'd place the matter a on an executive session agenda. At it, and I'd hope it be the president would direct him to cease and desist his inflammatory behavior. You might get a vote vote of the Board first. If he refuses, censure him with a vote of the Board. And announce in an open Board meeting that Mr X has been censured by the Board for conduct that potentially harms your Association.

One important reason for your Board to go on record is so that no one later can claim that directors just stood by while this person strived to discredit the Management company.

I believe this is a start for ways to think about this problem.
JM16 (North Carolina)
Posts: 24
Posted:
Former member. This is a pretty new neighborhood but the developer borrowed very old language for the bylaws.
KerryL1 (California)
Posts: 14,550
Posted:
I'n not understanding your reference, JM, to the bylaws...
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Remind the person you don't pee in the bed your sleeping in or plan to sell one day... The more you bad mouth the place, the less likely you find a buyer... Which eventually can be the most damaging to "Property Atractiveness" that can push house prices down.

If you don't like what is going on, then you submit bids for consideration for replacement... Although part of me thinks that can be part of his plan... May want to make sure not got a duck in this hunt for financial takeover...

Former HOA President
LarryB13 (Arizona)
Posts: 4,099
Posted:
Quote:
Posted By JM16 on 02/24/2017 8:10 AM
We're concerned over the potential of being sued for libel or slander due to this directors statements.


These are the statements of a director acting on his own behalf. Why would you believe that your association has some exposure to liability? What did your association attorney say when you consulted with him? Or any attorney? In any event, the plaintiff would have the burden of proving that the statements are false and defamatory.

If one of them were to sue, the discovery phase of litigation would require the plaintiff to open up his books for examination by the defendant. Most professionals have a skeleton or two in their closets and would not want to reveal their past indiscretions. The possibility of a lawsuit is remote.

Quote:

Additionally, we're concerned that the public statements are in clear conflict to their fiduciary duties as a member of the board.


"Fiduciary duty" means that the director must act in the best interests of the association. He apparently believes that two persons with close ties to board are acting outside that boundary. I strongly disagree with your implication that the director has some sort of duty to remain silent. His duty is to bring what he knows or believes to the board and the members and let them investigate for themselves.

JM16 (North Carolina)
Posts: 24
Posted:
Quote:
Posted By LarryB13 on 02/24/2017 6:54 PM
Posted By JM16 on 02/24/2017 8:10 AM


Additionally, we're concerned that the public statements are in clear conflict to their fiduciary duties as a member of the board.


"Fiduciary duty" means that the director must act in the best interests of the association. He apparently believes that two persons with close ties to board are acting outside that boundary. I strongly disagree with your implication that the director has some sort of duty to remain silent. His duty is to bring what he knows or believes to the board and the members and let them investigate for themselves.


Making a baseless accusation against this corporation because of a personal vendetta has nothing to do with any sort of duty to remain silent though. Where are you getting that this person with close ties to the board is acting outside the board? He? This board member in question is female.

Not sure where anything I've stated insinuates what you're describing?
JM16 (North Carolina)
Posts: 24
Posted:
Quote:
Posted By KerryL1 on 02/24/2017 2:02 PM
I'n not understanding your reference, JM, to the bylaws...

How the bylaws state the HOA can deal with directors and such. Recalls, elections, etc etc.
LarryB13 (Arizona)
Posts: 4,099
Posted:
Quote:
Posted By JM16 on 02/24/2017 7:04 PM
Making a baseless accusation against this corporation because of a personal vendetta has nothing to do with any sort of duty to remain silent though. Where are you getting that this person with close ties to the board is acting outside the board? He? This board member in question is female.

Not sure where anything I've stated insinuates what you're describing?


JM,

I know nothing of this situation except for what you posted. You told half a story. Or maybe a half of a half. You have no right to come down on me for trying to fill in the blanks in your tale.

Does it make a difference if the board member is male or female? Are you suggesting that she should stay home and bake a cake?

You provided no details of the "baseless accusation" or the "personal vendetta," so I cannot respond to that.

You initially wrote that, "We have an at large director who is making inflammatory social media statements including some that definitively states that our management agent and financial accounting partner has major accounting issues." This is the personal opinion of a board member made outside of a board meeting; it does not represent the position of the board. Yes, she can do that.
Board members have a duty to speak up when they believe something is wrong.
JM16 (North Carolina)
Posts: 24
Posted:
Not sure where I insinuated anything, but apparently I did provoke the troll in you.

TimB4 (Tennessee)
Posts: 21,059
Posted:
JM,

You are not on the board.
You are not in a position to really do anything but rally the neighbors and institute a recall or gather enough support so they don't win a reelection effort. However, that will not stop anything except, perhaps, remove some liability from the Association.

The Board, as others have said, can do some things but even those are limited.
They can censure, they can informally warn, they can adopt a policy about Directors posting, they can remove the person from Office (but not from the Board), if they own the site - they can ban the individual from the site or shut it down completely. That's it. However, that will likely not stop what you are describing. In fact, it may escalate it.

I was with Larry when he questioned your statement that the individuals actions may be a violation of their Fiduciary Duty. Since you did not provide an actual example of what was being posted (but did provide some info), one would have to fill in that blank and it appears that Larry and I took the position of warning others of potential financial issues would, in fact, be fulfilling their fiduciary duty by bringing it to the members attention.

Remember, we do not know what you know and what may be common knowledge to you is not common knowledge to us. Therefore, we take positions and fill in the blanks based on our own experiences. The newsletter I created and ran for three years informing the members of what their Board was doing may have been seen by some as "baseless accusations" or that I had a "personal vendetta. Others didn't see it that way. It's all about perspective on how one views anthers actions.

Since you are not on the Board, you may not have all the details.
Have you tried approaching the individual and ask what the basis is for their position (something many on this site do often)?
It could be that they know something you don't or that they are misinterpreting something you can explain to them.

BobD4 (up north)
Posts: 1,002
Posted:
Quote:
Posted By JM16 on 02/24/2017 8:10 AM
z inflammatory social media statements . . . None of which has any basis in fact. . . . How would you handle in this instance?

By recognizing that - whether or not true - allegations of a serious management risk should receive a credible review by or for the Board in the interest of the stakeholders.

The targets of the allegations should be given an opportunity to address the accusations. The Board's legal counsel may suggest additional forms of investigation or arrange it be done independently.

If the accusations are addressed credibly, a statement could be issued with professional input indicating the results.

Having shown its discharge of duty, the Board may wish to assure the stakeholders of the results & leave the accuser to either the consequences of unsupportable accusations or the reward for alerting to a genuine risk. Correct or not the Director at large may be acting in good faith & might be correct.

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