Board Changes management company

Our association has a 5 member board and retains the services of a management company. Our association president is a member of the board who was elected last year. she happens to work for another management company. our board has considered changing management companies and the president has totally recused herself from the process. the board is on the verge on hiring the management company that employs our president. this does not seem kosher. its certainly an appearance problem. if we hire this company, wouldnt she have to resign her position on the board? we are located in texas and are comprised of 750 homes. thanks for any help.

While there may be an "appearance" issue, the president certainly handled it appropriately and pulled herself out of the process. That is the appropriate thing to do.

I'm not sure there is a real conflict of interest, but, as you mentioned, there is an appearance of one, but it would really be up to the president to decide whether she should step down as president or not. That doesn't necessarily mean that she would or should go as far as resigning from the board.

Even as president, she is not the "boss" of the board and is only one vote out of 5 regardless.

thanks for the responses. I should have added one more thing that is bothering some of us. Yes we have a bidding process but two of the persons on the Board that are in favor of voting for the change to the management company which happens to employ our president have interesting appearance issues as well. One of the Directors who wants to vote for the change was personally recruited by the President to fill a Board vacancy (although unanimously accepted because no one else would step up) and has a very close social relationship with the President. The other Board member who wants to vote for the change is on record as stating that the only basis he has for selecting this company is his high opinion of the President. While the President has done the right thing by recusing, she has engaged in a soft sell at every single Board meeting by picking at things the current management company does and stating how hers does it different. It has had the effect of persuading this Director that they would be a good fit for us. thank you.

John,
All appearances of a conflict of interest should be avoided by the Board. I would expect the President to resign from the Board if the management company she works for is hired. Sealed bids from at least two other management companies are needed before consideration of the bids. The President should be excussed from that part of the Board meeting where bids are opened and discussed. If the company she works for is not low bidder the remaining Board members who want to hire this company should be quiried to justify their reasoning.

Anna,

I agree; I wouldn't want my employer to be hired to manage my assn, especially if I was a board member, Pres no less. However, IMO, there would only be a possible conflict of interest if the Pres were appointed as the manager of her assn.

According to the OP, it's his opinion that the Pres IS pushing to hire her employer. He said: "she has engaged in a soft sell at every single Board meeting by picking at things the current management company does and stating how hers does it different."