Why would a property manager want to serve on a board

If a board of directors lacks directors' and officers' insurance, and if there is nothing improper going on (for example, the property manager and its fees would be independently approved by other board members anyway), why would a property manager want to serve on a HOA board?

Since directors can get sued personally, serving on a board is at least somewhat risky, particularly when there is no insurance. I serve on a few nonprofit boards (and we have insurance), but I've declined invitations to serve on regular corporate boards without compensation, even when I had small investments in the companies.

A few residents of the NC HOA where the property manager serves on the board have asked the property manager, "what are you doing on the board" and the property manager has responded that it follows its fiduciary duties very closely and is not receiving any payment other than an arm's-length management fee. Some owners have hinted that the property manager is getting some additional payments from the HOA that haven't been disclosed, but I don't have any evidence of that other than hearsay.

But it does not make sense to me for a property manager to voluntarily serve on a HOA board, without insurance, if there is no benefit to the property manager (even making it easier to retain the HOA's business).

Thoughts?

Thanks.

There are HOAs in North Carolina where a non-owner/non-resident may be elected to the board of directors. On a healthy board of directors, a property manager wouldn't need to serve as a director as community residents would step forward to create the minimum board headcount.

Otherwise, no vendor should be a director as it's a conflict of interest for the most part. I've seen boards where the manager runs the show and a "rubber stamp" board follow their lead. A manager's influence can be wielded numerous ways.

Thanks. There is no D&O insurance, but the bylaws do require indemnification of directors. The bylaws do not limit who can serve on the board--anyone can, even the property manager.

Not a retirement community.

I’m still interested in reading the applicable excerpts from the governing docs ....

sure

In some cases, a non-member can serve on the board, however a property manager should never be on the HOA board. It's a conflict of interest. Period.

I cannot say why this person would want to be a part of the board. Does your community have difficulty finding people who want to be elected? Whatever the case, the property manager shouldn't be on the board.