Serve at the pleasure of Board

We have a new Web committee that is drafting their charter and do not want the verbiage..."The commiitte members serve at the pleasure of the Board" in their charter. Our other charters have the language of serving at the pleasure of the Board. This committee wants language that basically has conditions of the chair being replaced. Such as, "the chair can only be replaced if they intentially do not comply with the charter."

Our by laws and CCRs are silent on committee charters. There have never been any issues in the past on removing Chairs. In fact, a chair has never been removed. Volunteers are too valuable, scarce and appreciated.

The BOD usually drafts the charter and issues it to the new committee. In this case, we did not, some of the detail of scope of work was technical so thought it would be beneficial to have the committee draft it using BOD approved sample Charter.

The new Web committee finds the Serve at the Pleasure of the Board, meaningless. Most BODs find it normal, common language and appropriate. We understand the BOD will decide but are attempting to see if our line of thought is outdated and are concerned about conditions and the challenge and contest of proving "intential". That seems too subjective.

Any comments of expierence?.

Thank you. You are correct. Our non profit Corporation Commission specifically states....committee members shall serve at the pleasure of the board.

I agree.

TheresaR4,
If this group is giving the board this much trouble at the start of this committee you can probably expect at least as much or more when they get going. Do you really have a need for a Web Committee? What are they going to be responsible to do? What is the charter?

I personally think you guys may be signing up form more trouble than you might think. I would be firm and say this is our committee language. If you want to start one you follow these guide lines.

Committees are not elected they are appointed.

They do indeed work this way - at least the ones whose stock is publicly traded do.

Shareholders vote for candidates for the board of directors, with the number of votes depending on the number of shares they own. (Similar to one unit = one vote in an HOA. If you own more than one unit, you get more than one vote.) Occasionally shareholders are also allowed to vote on certain governance measures that the corporation is considering.

If you own shares of stock, you'll receive a notice of the annual meeting along with election materials and a proxy form. You can attend the meeting. You can designate an individual or "the board" to vote on your behalf. Again, very similar to HOA governance. From time to time you may have an activist who disagrees with how the corporation is being run and seeks election to the board by soliciting proxies. Sound familiar? Proctor & Gamble went through that recently.

Corporations also issue annual reports that are sent to their shareholders, just as HOA directors present reports at the annual meeting. Corporations audit their books annually, just as HOAs do, or should do. Corporations pay taxes, just as HOAs do. A republic doesn't pay taxes, it is the taxing entity.

Finally, shareholders have no say in the day to day running of the corporation (unless they're someone like Warren Buffet whose opinions may be listened to). If I'm a P&G shareholder, it doesn't matter how passionate I am about the price of Charmin, I don't have any say in determining that. As a shareholder, I'm not entitled to serve on any committee that the corporate board or management may appoint. Committee service is very much "at their pleasure".

Obviously there are major difference, too. Shareholders don't pay assessments to support the corporation the way HOA members do. But the governance structure, which is what we're talking about with boards and committees and such, are very similar. Homeowners get upset when they believe that they are living in a democracy and then find out that they are not. But that's the reality.

Theresa,
The bottom line is committees are designed to make things easier on the board. They do the leg work and report back to the board findings. If they are making the board jump through hoops already they are not helping they are hurting. Thank them for their input and go with business as usual.

Seems like much ado about nothing. It doesn't matter what the committee wants. If the committee wrote its own charter and the board approved it with language like, "the committee will operate independently of the board," there's nothing to stop the board from disbanding and dissolving the committee a week later (or a month, or a year, etc.).

Glad it's working out Theresa. Some HOAs, like ours have a board liaison who attends meetings and helps keep th committee on track re: various things, e.g., budgets or board policy about various items. We do not require on if the committee has a director i on it which often is the case.

Your board might appoint a director to write a "Guidelines for All Committees" so that Owners who want to form one know the Board's exceptions and that it's ultimately responsible.

One of the best reasons to encourage committees is that they're good pipelines for board service.

I keep wondering - if committees didn't work for the BoD (serve at the pleasure), to who would they be accountable?