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Best practice for electing / appointing new Directors?

Started by BillD16 • 14 replies • 238 views

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BillD16 (Texas)
Posts: 974
Posted:
Hi all. So in a few days we’ll have our Annual Meeting, and I’ll roll off of the Board.

Our PM went and set up the meeting and agenda without consulting the Board - which is annoying but soon to be Not My Problem.

I’m curious what y’all might think of the manner in which the election is being held:

- It’s electronic voting.

- There are three open Board Positions. 5 people put their names in (a lot for us).

- The 5 people are referred to as “candidates”, and the electronic voting system allowed us to choose up to 3.

Here’s where it gets interesting: the meeting agenda says:

XV. Election of one Director.

XVI. Appointment of two Directors.

Having served the full three years, I’m being replaced by “Election”. Director terms are ‘staggered’, and two Directors quit mid-term. And so those Directors will be replaced by “Appointment” (with terms ending at the next Annual Meeting). At least, that is my understanding. I believe this is all proper, but our PM set it all up without telling us about it.

And so I’m curious what the Best Practice is in such a situation?

The simplest (and, I think, best) route would be to assign the top-voted candidate to the “Elected” open seat, and then the #2- and #3-voted candidates to the remaining “Appointed” open seats. And this is probably what everyone in the neighborhood expects.

But: can the two existing Directors, along with the newly-elected Director, just go and appoint anyone they want? Either from the remaining 4 candidates, or anyone else who meets the qualifications? This seems a bit underhanded, but my Board is a bit strange.

Thoughts? Thank you!

Bill

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”
SheliaH (Indiana)
Posts: 6,964
Posted:
Considering y’all don’t have a president, the property manager probably thought “damn , these people really don’t have their shit together (they can’t even select a president or everyone’s too skurred to take the job) , so I may as well take something off their plate and set up this meeting and agenda myself. Otherwise, if it’s left to them, it won’t get done and there may not been an annual meeting until September!

Of course, the PM was out of order – he or she should have sent the proposed agenda and date to the current board (such as they are) so they could make a decision. What’s wrong with reminding everyone they can’t sit on this because the documents require the meeting be held in July and with Bill’s departure, it’s imperative that the three open spots are filled sooner rather than later?

Since it appears your colleagues let the thing ride, they will have to live with the consequences. Appointing the two replacements should have been done already, but that didn’t happen either, so as a practical matter, I think you have a great idea – the top vote getter replaces you, and the second and third runner up take the appointed spots. This way, the community is more aware of who’s going to serve because they had a hand in that decision now instead of the board appointing someone who may or may not be up to the job.

The candidates should be made aware of what’s going to happen, and to keep things even more transparent, I’d explain to the audience what’s about to happen and why, and then start the show by asking if there’s anyone present who’d like to be considered for an appointment. If you didn’t have a “meet the candidates” event, you may as well have the candidates and whoever speaks up from the floor to give a brief overview of who they are, how long they’ve lived in the community, and why they want the spot. Then hold the election and let the best person win.

Or - hold the election for your spot and then tell everyone the board needs to appoint two people to complete the terms of the previous board members. That announcement can be: "Anyone interested should write their name and contact information on this piece of paper. At the August meeting, you will be invited to give a brief presentation on your background and why you want the job, and answer a few more questions, and then the board will make its selection. Remember, these appointed board members will be completing the terms of Ms. X and Mr. Z, which would have ended next year - at that time, the appointees may choose to run for those spots and other homeowners will be welcome to run against them."
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
JackieB4 (California)
Posts: 398
Posted:
Bill, having lived through several annual election SNAFUs (and still shake my head), my thoughts are: "BEST PRACTICES" IS A SUBJECTIVE term. The law needs to be followed and should be in your BYLAWS. Ignore what's been done in the past and follow your BYLAWS. YOU read them!!! I've seen "experts" often misguide the Board and membership.
Now...take a slow deeeeep breath!
TimB4 (Tennessee)
Posts: 21,062
Posted:
Without looking, I expect that the statutes allow the directors to fill vacancies by appointment.

Therefore, the board may appoint anyone they think will fit the position and, if required, meets any qualifying factors.

That said, it appears that your board is allowing the membership to have a say on who is appointed by allowing the membership to vote for three candidates (as that is also a typical option within statutes). Based on this appearance, I would expect that out of the top three candidates, one will be elected and the board will appoint the next two to fill the vacant seats for the remainder of that seats term (hence, preserving your staggered terms).
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By BillD16 on 06/19/2024 5:32 AM
in a few days we’ll have our Annual Meeting,
...
Here’s where it gets interesting: the meeting agenda says:

XV. Election of one Director.

XVI. Appointment of two Directors.

Having served the full three years, I’m being replaced by “Election”. Director terms are ‘staggered’, and two Directors quit mid-term. And so those Directors will be replaced by “Appointment” (with terms ending at the next Annual Meeting). At least, that is my understanding. I believe this is all proper, but our PM set it all up without telling us about it.

And so I’m curious what the Best Practice is in such a situation?

The simplest (and, I think, best) route would be to assign the top-voted candidate to the “Elected” open seat, and then the #2- and #3-voted candidates to the remaining “Appointed” open seats. And this is probably what everyone in the neighborhood expects.

But: can the two existing Directors, along with the newly-elected Director, just go and appoint anyone they want? Either from the remaining 4 candidates, or anyone else who meets the qualifications?
I feel this is more a statutory matter. From where I am sitting, the question above has a two-part response. From TPC 209, first, yup, the board replaces directors who resign before their term has expired. At this date, for the board to wait until the newest director has been elected, so three directors can vote on the appointees filling unexpired terms, is reasonable. Second, the (statutory technical) problem is that TPC 209 requires these two appointments to happen at an open board meeting. So far it looks like the HOA is going to try to have an un-noticed board meeting within the annual meeting or without notice. Statute prohibits this.

None of the directors here want to read the law. IMO the way the board is doing this is "good enough."
CathyA3 (Ohio)
Posts: 6,299
Posted:
The manager's interpretation of "elected" vs. "appointed" sounds right, as far as it goes.

However, I think they'll be running up against some issues because those empty positions should have been filled before the annual meeting - at which point the appointed directors' terms ended, and all candidates will be elected.

Regarding appointed directors serving only until the next annual meeting, this came up in my community recently. I was trying to think of a simple way to explain things to our extremely inexperienced board why that's not the case in our community. Long story short, I realized that booting out an appointed director at the next annual meeting is actually incompatible with maintaining staggered terms. The explanation is a little convoluted, but basically you will be forced into electing the appointed director's replacement for less than a full term in order to preserve the staggering, which contradicts the sentence in our bylaws that states directors are elected to a full (3-year) term.

So, either you let appointed directors serve out whatever length term they're appointed to and you maintain the orderly staggering of terms, or you boot 'em out at the next annual and give up the staggering. In the latter case, the terms will soon get out of whack and you'll start making things up as you go along.

(The kick 'em out early business has never sat right with me, and now I know why. In communities that have staggered terms, it introduces a logical inconsistency when you look at the functioning of a board over time. If state law requires it, that doesn't remove the inconsistency.)

But... not your circus, not your monkeys. Doesn't it feel great to say that?
KerryL1 (California)
Posts: 14,550
Posted:
With Jackie, BillD. WHAT do your Bylaws SAY? This isn't a "best practices" topic. It's bound by your own docs & state statute. Our By a, for instance, say that vaccines are filled by the Board, but that if the Board does not fill them owners can vote to fill them.

Also agreed with Shelia that the PM went on thier own given your Board has barely acted on anything at honest-to-gawd board meetings & is a mess.

This happeneded in my HOA several years ago. 5 candidates were on the ballot, 3 openings. The top vote getter was elected for the full term, the next two vote-getters served the remainder of the terms of the resignees. And yes, this was to preserve staggered terms that probably are required in your Bylaws, BillD.
BillD16 (Texas)
Posts: 974
Posted:
Quote:
Posted By SheliaH on 06/19/2024 7:06 AM
Considering y’all don’t have a president, the property manager probably thought “damn , these people really don’t have their shit together (they can’t even select a president or everyone’s too skurred to take the job) , so I may as well take something off their plate and set up this meeting and agenda myself. Otherwise, if it’s left to them, it won’t get done and there may not been an annual meeting until September!

Of course, the PM was out of order – he or she should have sent the proposed agenda and date to the current board (such as they are) so they could make a decision. What’s wrong with reminding everyone they can’t sit on this because the documents require the meeting be held in July and with Bill’s departure, it’s imperative that the three open spots are filled sooner rather than later?

Since it appears your colleagues let the thing ride, they will have to live with the consequences. Appointing the two replacements should have been done already, but that didn’t happen either, so as a practical matter, I think you have a great idea – the top vote getter replaces you, and the second and third runner up take the appointed spots. This way, the community is more aware of who’s going to serve because they had a hand in that decision now instead of the board appointing someone who may or may not be up to the job.

The candidates should be made aware of what’s going to happen, and to keep things even more transparent, I’d explain to the audience what’s about to happen and why, and then start the show by asking if there’s anyone present who’d like to be considered for an appointment. If you didn’t have a “meet the candidates” event, you may as well have the candidates and whoever speaks up from the floor to give a brief overview of who they are, how long they’ve lived in the community, and why they want the spot. Then hold the election and let the best person win.

Or - hold the election for your spot and then tell everyone the board needs to appoint two people to complete the terms of the previous board members. That announcement can be: "Anyone interested should write their name and contact information on this piece of paper. At the August meeting, you will be invited to give a brief presentation on your background and why you want the job, and answer a few more questions, and then the board will make its selection. Remember, these appointed board members will be completing the terms of Ms. X and Mr. Z, which would have ended next year - at that time, the appointees may choose to run for those spots and other homeowners will be welcome to run against them."

Heh, it’s almost eerie how spot-on your are with some of your observations! I’m a bit less kind about it, but I’m very sure our PM is taking advantage of our dysfunctional Board to get away with all kinds of shenanigans. I’m pondering whether or not the “New Board” will either a) not let them get away with it anymore, or b) simply bend over and let our PM run the show. Which has happened before in my neighborhood, and it seems pretty easy to pull off if you’re working with a group of clueless, disagreeable people.

My *guess* is that our Board will go the ‘easy’ route and elect-appoint the top three candidates. Because it’s easy, it’s (probably) what the PM wants, and (frankly) I don’t think the other Board members know they could do it differently.

Oh, you raised another point I hadn’t thought of: I don’t believe any of the candidates understand what is going on, either.

Bill
HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”
BillD16 (Texas)
Posts: 974
Posted:
Quote:
Posted By JackieB4 on 06/19/2024 7:14 AM
Bill, having lived through several annual election SNAFUs (and still shake my head), my thoughts are: "BEST PRACTICES" IS A SUBJECTIVE term. The law needs to be followed and should be in your BYLAWS. Ignore what's been done in the past and follow your BYLAWS. YOU read them!!! I've seen "experts" often misguide the Board and membership.
Now...take a slow deeeeep breath!

Alas, our Bylaws etc do not address this situation. I believe it will ‘go’ the way TimB described. Although I do not believe this was a choice knowingly made by the Board. And in fact, I don’t think the other Board members are even aware of it.

Bill
HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”
TerriS6 (California)
Posts: 3,284
Posted:
Curious, Bill, as you have 5 running for 3 seats using electronic voting, if there is a challenge to the results, how do you authenticate the electronic ballot count? Thank you.
KerryL1 (California)
Posts: 14,550
Posted:
Your Bylaws are silent on this matter, BillD? Hmmmm. What about your Certificate of Formation???
BillD16 (Texas)
Posts: 974
Posted:
Quote:
Posted By ElleN on 06/19/2024 7:37 AM
Posted By BillD16 on 06/19/2024 5:32 AM
in a few days we’ll have our Annual Meeting,
...
Here’s where it gets interesting: the meeting agenda says:

XV. Election of one Director.

XVI. Appointment of two Directors.

Having served the full three years, I’m being replaced by “Election”. Director terms are ‘staggered’, and two Directors quit mid-term. And so those Directors will be replaced by “Appointment” (with terms ending at the next Annual Meeting). At least, that is my understanding. I believe this is all proper, but our PM set it all up without telling us about it.

And so I’m curious what the Best Practice is in such a situation?

The simplest (and, I think, best) route would be to assign the top-voted candidate to the “Elected” open seat, and then the #2- and #3-voted candidates to the remaining “Appointed” open seats. And this is probably what everyone in the neighborhood expects.

But: can the two existing Directors, along with the newly-elected Director, just go and appoint anyone they want? Either from the remaining 4 candidates, or anyone else who meets the qualifications?
I feel this is more a statutory matter. From where I am sitting, the question above has a two-part response. From TPC 209, first, yup, the board replaces directors who resign before their term has expired. At this date, for the board to wait until the newest director has been elected, so three directors can vote on the appointees filling unexpired terms, is reasonable. Second, the (statutory technical) problem is that TPC 209 requires these two appointments to happen at an open board meeting. So far it looks like the HOA is going to try to have an un-noticed board meeting within the annual meeting or without notice. Statute prohibits this.

None of the directors here want to read the law. IMO the way the board is doing this is "good enough."

ElleN! You’ve been missed!

Psychic person that you are: yeah, I’m not sure that this meeting was properly noticed. But I doubt that anyone in my neighborhood cares. As others have noted, the missing Directors should have been appointed immediately (well, within 30 days) of their resignation. It’s just Business As Usual around here :/ In my mind, the biggest error is that it seems like the PM is attempting to sneak this ‘election/appointment’ thing past everyone without telling them.

On the bright side, a couple of the candidates are really good people, and it would be good for everyone if they get on the Board. On the other hand, at least one candidate is a complete psycho. I have absolutely no idea of how the election numbers will go.

But the more I think about it, I expect the Board will go with the ‘obvious’ 1st, 2nd, and 3rd place election winners, if no other reason than they’d catch hell from the 2nd / 3rd place candidates and many others if they took it upon themselves to ignore the election results.

I’m really looking forward to the weekend.

Bill
HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”
BillD16 (Texas)
Posts: 974
Posted:
Quote:
Posted By TerriS6 on 06/19/2024 10:49 AM
Curious, Bill, as you have 5 running for 3 seats using electronic voting, if there is a challenge to the results, how do you authenticate the electronic ballot count? Thank you.

I don’t know, specifically. We’re using a paid commercial system, and we get a receipt after registering our actual vote. They’ve probably got a process for a ‘recount’, but I don’t know what it is, or how expensive it is. State law has something to say about costs in a recount, but I don’t know if it applies to an electronic vote.

Bill
HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”
BillD16 (Texas)
Posts: 974
Posted:
Quote:
Posted By CathyA3 on 06/19/2024 8:34 AM
The manager's interpretation of "elected" vs. "appointed" sounds right, as far as it goes.

However, I think they'll be running up against some issues because those empty positions should have been filled before the annual meeting - at which point the appointed directors' terms ended, and all candidates will be elected.

Regarding appointed directors serving only until the next annual meeting, this came up in my community recently. I was trying to think of a simple way to explain things to our extremely inexperienced board why that's not the case in our community. Long story short, I realized that booting out an appointed director at the next annual meeting is actually incompatible with maintaining staggered terms. The explanation is a little convoluted, but basically you will be forced into electing the appointed director's replacement for less than a full term in order to preserve the staggering, which contradicts the sentence in our bylaws that states directors are elected to a full (3-year) term.

So, either you let appointed directors serve out whatever length term they're appointed to and you maintain the orderly staggering of terms, or you boot 'em out at the next annual and give up the staggering. In the latter case, the terms will soon get out of whack and you'll start making things up as you go along.

(The kick 'em out early business has never sat right with me, and now I know why. In communities that have staggered terms, it introduces a logical inconsistency when you look at the functioning of a board over time. If state law requires it, that doesn't remove the inconsistency.)

But... not your circus, not your monkeys. Doesn't it feel great to say that?

It really really does

If there’s one thing I’ve learned by asking y’all about this here today, it’s that I sorta get why the PM might be trying to ‘sneak’ this situation past: it’s *not* simple to explain.

Thanks everyone!

Bill
HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By BillD16 on 06/19/2024 11:14 AM

Psychic person that you are: yeah, I’m not sure that this meeting was properly noticed. But I doubt that anyone in my neighborhood cares. As others have noted, the missing Directors should have been appointed immediately (well, within 30 days) of their resignation. It’s just Business As Usual around here :/ In my mind, the biggest error is that it seems like the PM is attempting to sneak this ‘election/appointment’ thing past everyone without telling them.
I am not convinced anyone there is trying to sneak around. Facts:

-- Nothing in your bylaws or state law requires that the HOA run an election for the mid-term vacancies resulting from resignations.

-- The board has no obligation whatsoever to appoint any of the declared candidates.

-- When ensuring terms remain staggered is possible, then I believe doing so is important.

Aside: I think no one, zero, misses posts about statutes, governing documents et cetera, be they mine or anyone else's. I think this forum is about posting off the top of one's head, to recreate, socialize, be heard, talk about one's self and so feel validated.

On the other hand, I am sure your liberal arts studies of industrial psychology et cetera argue that this sort of recreation among HOA owners and volunteer HOA directors is not for nothing and has enormous value.

I hope you enjoy your time off the board. Perhaps months down the road, you will glean lessons from this period? As many do IMO.

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