Conflict of Interest?

State statutes often have something to say about such conflicts of interest. But every time (if memory serves), the clincher is that, as long as the conflict is disclosed to voting owners, and the person with the conflict abstains from certain votes pertaining to the conflict, the person can continue to lawfully serve on the board.

If you would like me to check what Georgia's nonprofit corporation statute and HOA statute say on this, ask.

How does a group "FORCE" an HOA to act in a certain way? The BOD votes...that's the ruling. I don't see the conflict of interest with PRIOR EMPLOYMENT. Don't we all have PRIORS?-lol.

Yes, there could be a conflict of interest even if your HOA doesn't use the management company that employs him. It would be more of one if he actually owned the management company. Even if he is only an employee, he could benefit financially if he received a bonus from steering the HOA to his employer. At the very least, it gives the appearance of wrongdoing. It's too bad, because this person probably has a lot of useful experience.

Policies that prohibit conflicts of interests don't just protect two potential adversaries - they also protect the person caught in the middle who can't fulfill his duties to both. A well-run management company probably has language in their employee's contract or elsewhere prohibiting them from acting against the management company's interests. This is something a manager may run up against if he serves on the board of a client HOA that ends up in a dispute of some sort with management.

I've never seen any mention of conflicts of interest in bylaws. Board members have a fiduciary duty to the association, and a conflict of interest is not compatible with that. The issue is implied. HOAs can put something in their policies or codes of conduct for the board, although the situation comes up pretty infrequently. (I'm in my 16th year of serving on a condo association board, and I only had a conflict of interest come up once - I worked for the builder of my community, which had another year or so of work remaining when I was elected. One time I had to recuse myself from a discussion, and apparently nothing came of it. It was no big deal.)

Does your HOA have an annual picnic? Can a person who works at a grocery serve on the board?

If the board were to sign a contract employing the grocery store to provide professional services in its capacity as a store (eg. running a small outlet store on association premises), then a person who works for the store in a decision-making capacity would have a conflict of interest. If the person stocks groceries or wrangles shopping carts left in the parking lot, then no.

If the board candidate worked for the management company as a janitor, this question wouldn't have even come up. It's because he's a COO at the management company - presumably he's in a position to influence the company's decisions and benefit financially from them.

What would you all say if a board member owned a landscaping company (or was the COO of one)?

Would you have any issues if that board member wanted to bid on the association's landscape contract? Do you believe that he would not have an incentive to undermine the HOA's existing contract with a different company? Assuming he recused himself from discussions and voting on the contract, do you believe that he would be able to fairly and impartially manage the work done by his company if he was awarded the contract? If a dispute arose between the board and his company, would you have any issues if he recused himself again but acted on behalf of his company during negotiations?

Do you believe that this situation is different from the one in the OP? If yes, why?

Correct. Per the definition in the statute section I linked, this is a possible conflict of interest. It becomes an actual conflict of interest when first, the guy wins election to the board; and second, anytime there is discussion and/or a vote on a management contract or possibly related management issues where this guy (if elected to the board) has a "beneficial financial interest."

Quote from original post:

"A few years ago, an HOA member served as a Director while they were also the COO of the HOA's current management company. Upon discovering this, I and several other HOA members contacted the BOD and the HAO President and raised our concerns regarding what we saw as a significant conflict of interest. A couple of months later the person resigned from the BOD. Now the same individual appears to have put their name on the upcoming ballot to run again for the BOD. This person is still in a leadership/management position with a management company, but we do not use the company at this time. I'm very concerned if they are elected that they may force the HOA to contract for Management services with their company."

It was an actual conflict of interest in the first case. It is a potential conflict of interest if the person were to be elected to the board now. Unless you believe that management companies have no connection to an HOA...

It seems the individual is lacking integrity - especially if the blatant conflict was not disclosed. This person, if elected, should not have any part in interviewing or obtaining quotes from prospective management companies if his company is an option and he definitely should abstain from voting.

I agree that here is no conflict of interest.

There is a "potential" conflict of interest, IF this director needs to vote on a management company AND/or s/he nominates their firm, etc., per Terri. But, even then, and with the Board knowing the person works at that firm, s/he cannot "force" anything.

Agreeing with Dean & Kelly, with no current relationship between xxx's firm and the Association, there is no conflict or "potential" conflict of interest.