Director Selected for Partial Term

As I'm sure is common in HOA bylaws, our seven Director seats have staggered two-year terms. Directors are elected at Annual Meetings by the Membership; mid-term vacancies on the BoD are to be filled by the remaining Directors selecting a replacement.

(The bylaws specify that the BoD "elects" officers and replacement Directors, but I often see "election" confused in discussions by not distinguishing between the BoD and the Membership. So, I am using "selection" to mean the BoD appoints/elects an officer or replacement Director by motion and vote.)

Recently, our Treasurer resigned (after going AWOL for a month). Two other Directors struggled to put together a quarterly financial report; it appeared to be informative and accurate, but not very complete or professional. They did a passable job -- a best effort for non-accountants.

Tonight we had our monthly BoD meeting. One of the Directors who did the financial report invited anyone to volunteer to help out. An elderly former Director with some accounting background (and an MBA) stepped up. The President first explained to the volunteer that the term to be filled runs through the end of next year. Then she suggested they select him to fill the vacancy for the remainder of this year. The motion passed.

Our bylaws do not provide for any partial-term elections. I don't know of any state laws that cover this. Directors cannot remove a director.

My opinion is that the selection is binding, but the partial-term restriction is ineffective.

What say you all? Can such a decision be made by a BoD? Is it consistent with the Bylaws that I described? Or does this conflict with the Bylaws? If so, is the proper resolution as I suggested?

No extension; not sure what you mean. Either I did not understand you or I did not lay out the situation well.

The term of the Director whom he is replacing runs until the end of 2010. The President moved to select him to just serve through the end of 2009. The Bylaws specify that Directors shall select to fill a vacant seat for the remainder of the term of that seat.

Sorry that I was not clear. The volunteer was actually selected for both -- to replace the Director and to serve as Treasurer. The implication was that the motion was both to select the volunteer to fill the vacant seat and to then select that new Director as Treasurer.

I don't really have a problem with the informality and combination of the motions, since the purpose is allowed and appropriate.

I think the President meant only until 31st December and then the BoD could keep him or pick someone else. But either way, I think we are on the same page. The selection for the Director seat must be for the full term (as stated in the Bylaws), and once seated the Director cannot be prematurely removed by the BoD -- the partial-term restriction is neither permitted nor effective.

Anyone see problems with this or think otherwise?

As I see it, this person was appointed by the board to fill a position but for only a specific time. I see nothing wrong with that. It was not election, as I see it, but an appointment (by motion)and the length of the appointment is really up to the board.

Susan, I have to say that I agree with you somewhat. The new director/treasurer was appointed (selected/elected) by the board. While technically the By-laws may state that the board can appoint/select/elect to fill a vacancy to fill out an unexpired term, because the directors appointed/selected/elected the new board member/director, they most likely also have the ability, then, to un-appoint/de-select/de-elect.

Therefore, if they want to remove this person at the end of the year, they have that right/ability to do so.

Now, the newly appointed/selected/elected director/treasurer may prove to be so effective and competent, the rest of the board may find that they do, in fact, want this person to continue on through the end of 2010.

But, if they want to remove him, they most likely have that ability, as they were the ones to appoint him.

Michele,

The AZ nonprofit corp act states that an appointed director may be removed, with or without cause, by the person making the appointment. In the case of an HOA that would be the BOD. This makes absolute sense to me; whoever elects or appoints a director should be the one to remove him. This is why we always ask if the officers are elected by the members or by the BOD. Of course I know different states have different laws and some may even be silent on this issue, in which case the board can do as they wish (if the bylaws are also silent).