Code of Ethics

Started by JamshedB • 10 replies • 765 views

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JamshedB (Florida)
Posts: 1

Posted:

I am a newly elected member of the Master Board in Royal Wood Golf and Country Club, in Naples, FL. Royal Wood consists of six condominium associations and one HOA of 175 homes, with a total of 800 members. The Master Board consists of seven members, six from each condominium association and one from the HOA.

Our by-laws do not have a provision for board members to sign a code of ethics. A code of ethics was never signed in the past by any board member. I do not wish to sign it. Our president and some other members have asked me to sign a "code of ethics" and the president has stated "Most of us have signed it. When we get into discussions on opinions by lawyers, salary issues, executive session items which can not be shared, which are for Board members only, then you can be excused if you haven't agreed not to share with your friends."

Please advise if, in the absence of a by-law calling for the signing of a code of ethics, I am required to sign. Please also advise if the above threat of exclusion is reviewable by the State of Florida and/or Collier County, where the club is located.

Jamshed B

CathyA3 (Ohio)
Posts: 6,299

Posted:

Hopefully someone from Florida will chime in. I Googled a bit but didn't find any information about whether such codes are required in Florida or if there is any difference between HOAs and COAs. However, I found several examples of codes used by other FL communities.

Personal opinion: these codes are well meaning but ineffective, leading to a false sense of security. In my experience, knowledgeable board members who take their duties seriously will already be acting ethically - a signed piece of paper is not necessary. In contrast, the bad actors on a board will do what they want to do, laws and ethics be d***ed - a signed piece of paper will not stop them.

Another important consideration: some lawyers have said that signing such a code may negate the "business judgement" defense if the board is sued. Basically, a board member must be free to use his best judgement when evaluating association issues. By committing ahead of time to follow a particular course of action, the board member may be tying his hands.

Bottom line: I'm a stickler for doing things "by the book" but I would not sign an ethics agreement. If there is no state code requiring them and your bylaws don't require them either, then you can't be forced to sign one. On the other hand, your fellow board members can make your life miserable, so I always recommend picking your battles.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Board members are already fiduciaries.

A Code of Ethics is just nonsense - in addition to not signing it, I would insist it be eliminated.

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By JamshedB on 04/20/2020 6:28 AM
Our president and some other members have asked me to sign a "code of ethics" and the president has stated "Most of us have signed it. When we get into discussions on opinions by lawyers, salary issues, executive session items which can not be shared, which are for Board members only, then you can be excused if you haven't agreed not to share with your friends."

Ask the President: "Would you please show me where the governing documents or Florida statutes say that a HOA may exclude a director from discussions if the director has not signed a code of ethics?"

Quote:

Posted By JamshedB on 04/20/2020 6:28 AM
Please advise if, in the absence of a by-law calling for the signing of a code of ethics, I am required to sign.

Neither the Declaration nor statutes require you to sign.

Quote:

Posted By JamshedB on 04/20/2020 6:28 AM

Please also advise if the above threat of exclusion is reviewable by the State of Florida and/or Collier County, where the club is located.

I think actual exclusion is a dispute over "conduct of meetings" that Florida statute section 718.1255 covers. Upon receiving a properly submitted complaint on this matter, the Florida Division of Condominiums yada must assign an arbitrator. See http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0718/0718.html

Addressing such a dispute is a pretty big deal that is going to drain all. You have an incompetent President and possibly others on the board who are incompetent. Keep reading here and you will see how draining this is on a person.

Else --
This appears to be a condominium, subject to the Florida Condominium Act and Florida Not For Profit Corporation Act.

I agree with CathyA3's points.

If a director has been provably informing non-directors of executive meeting discussion, then this is a serious breach of fiduciary duty. Make sure you do not do this or at least, are not caught.

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By JamshedB on 04/20/2020 6:28 AM
When we get into discussions on opinions by lawyers, salary issues, executive session items which can not be shared, which are for Board members only, then you can be excused if you haven't agreed not to share with your friends."

Consider submitting a signed, notarized statement stating the following: "Pursuant to a director's fiduciary duty, I agree not to share the subjects of executive session meetings with any non-director." Signed, ______________ I think this is a reasonable compromise. It is redundant, since statute says a director has a fiduciary duty to the HOA, but to keep the peace, be redundant.

LanceG1 (Georgia)
Posts: 97

Posted:

These are not a requirement to serve. That said you do need to be educated on the do's and don'ts. IE: don't share confidential information that can get the board sued under employment or the fair credit reporting act etc.. I made an issue about one when I first became a board member and was presented with one from the management company. My particular issue was a provision that seemed to be worded mostly in favor of the management company not the association.

We have some new board members in my association and one new member has a lot of questions about the do's and don'ts and feels that some sort of a formal set of guardrails might be helpful. In that case this is more of a new board member education issue that absolutely needs to be solved. I can see the appeal a set of guardrails in that circumstance, but IMHO prefer improving how we educate people vs a document that my have more drawbacks.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Right on, Lance!

There are guardrails - these sorts of things exist, already - the new Board members - and, even most experienced Board members, need to review.

Quick online search turned up this short one from CAI that looks to be pretty darn good ...

https://www.caionline.org/HomeownerLeaders/ResourcesforHomeownerLeaders/G2G_ModelCodeEthics.pdf

SheliaH (Indiana)
Posts: 6,964

Posted:

What Lance said. I don't think you're required to sign a code of ethics, but that DOES NOT exclude you from behaving in an ethical manner. As long as you're on the board, you will be just as responsible for the decisions it makes, just like everyone else and regardless of signing a code of ethics or not. If that scares you, you might want to reconsider serving.

For the most part, ethical behavior among HOA board members should start with the understanding it's not just about you and your board colleagues. It's not complicated - you're there to help make decisions that will benefit the ENTIRE community. Relatively simple behavior like:

Not discussing executive session subjects with unauthorized people (including your spouse by the way)

Watching for any situation where you may have a potential or actual conflict of interest. If you do, disclose it immediately and if you can't resolve it, you excuse yourself from discussing or voting on that item).

Attending all meetings and being on time (if you're running late or can't make it, tell the president, secretary and/or property manager)

Reading your documents, the management report and whatever else the board will be discussing so you can contribute to the conversation and apply careful thought to the issues

Abstaining from voting ONLY if you have a conflict of interest (which you should have already disclosed and if you couldn't fix it, do not participate in the discussion).

None of that requires a code of ethics.

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

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By JamshedB on 04/20/2020 6:28 AM
I am a newly elected member of the Master Board in Royal Wood Golf and Country Club, in Naples, FL. Royal Wood consists of six condominium associations and one HOA of 175 homes, with a total of 800 members. The Master Board consists of seven members, six from each condominium association and one from the HOA.

Our by-laws do not have a provision for board members to sign a code of ethics. A code of ethics was never signed in the past by any board member. I do not wish to sign it. Our president and some other members have asked me to sign a "code of ethics" and the president has stated "Most of us have signed it. When we get into discussions on opinions by lawyers, salary issues, executive session items which can not be shared, which are for Board members only, then you can be excused if you haven't agreed not to share with your friends."

Please advise if, in the absence of a by-law calling for the signing of a code of ethics, I am required to sign. Please also advise if the above threat of exclusion is reviewable by the State of Florida and/or Collier County, where the club is located.

I think no one is obliged to sign any such thing if the governing documents do not require it. The president has no power to exclude anyone from anything if they don't sign. We had a near-identical situation several years ago. The president was a control freak and wasn't satisfied with how little control she actually had, so she found a boilerplate "code of ethics" online and tinkered with it to grant her powers not in accordance with state law or our CC&Rs. 4 of the other 6 directors signed her "code" and 2 others refused. They were quite brave, I think, and when she demanded they sign it, they insisted that she show them where our Bylaws or CC&Rs gave her the power to establish and enforce a "Code of Ethics" that all board members were obligated to sign. She reluctantly backed down, but not before she ran up 2 hours' worth of the attorney's time that we all had to pay for. It was the attorney, in fact, who finally told her that she could not do what she wanted.

There's no state agency, board, bureau or official that will consider or rule on whether or not the "threat of exclusion" is lawful and/or enforceable. The state just doesn't deal with questions like that. If you don't sign it, what are they going to do? In my case, the president threatened to remove anyone who refused to sign from the board. That's clearly not allowed in Florida. Only a recall vote of the members can remove someone from the board (there are a few exceptions, but not many).

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Jam
Code of Conducts are not worth the paper they are written on. Cheaters cheat.

JimB37 (Florida)
Posts: 76

Posted:

Jamshed,
Welcome to the crazy club. (From another not far from you.)
Much of what I'm about to say has been already said in one form or another, but I thought I would chime in "one new guy to another".

First, I went through this last year and I handed it back to the President. There is no statutory basis for the existence of such a document. The President and his/her minions can pound sand on that point. As to having some sort of guide by which you should conduct yourself, that would fall under the broad umbrella of your fiduciary responsibilities as a Board member. That IS law, and there are consequences for failing in this regard. If you would still prefer some guidance, there is a link to what I would refer to as a common sense guide in one of the other replies.

As for the threat of preventing you from exercising your duties as a duly elected Board member, the only body with the authority to impede your ability to function as a Board member is the same one that elected you: The Members. Regardless of any provisions to the contrary in the governing documents.

Let's say for a moment that they do convince you to sign something and you violate that, it is unenforceable. I simply refer you to the preceding paragraph.

Hope you enjoy your year.

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