Confidentiality Agreement & Conflict of Interest Statement

Do any boards have a formal confidentiality agreement and/or a conflict of interest statement that they have their members sign or at the very least have as principles for the board? If you do would you be willing to share with the rest of us?

Contrary to what some might believe in some areas Boards do in fact use confidentiality agreements. One being ours.

Our attorney drafted one for us and all Board members are asked to sign.

I would discuss this with your attorney to see if there are any restrictions or requirements in your state or under your documents.

There are many issues before the Baord that in some cases should be confidential.

Jon

What does your association do if a board member fails to comply with the statement they signed?

We do not have any formal agreements. A Board member is elected, so if there is a problem the membership must remove them, they can't be "fired" per se.

I also think that MOST business conducted by the Board should be open to the membership (ie. at Board meetings, in minutes, etc.) so there cannot be any claim of wrongdoing outside of meetings.

I am not sure what a confidentiality agreement would entail or what it would accomplish, or even how it would be enforced.

Chris try this for a sample ethics policy which covers confidentiality. As always you should have anything like this vetted by the HOA attorney to make sure it conforms to your CC&R’s and any applicable state law.

http://www.davis-stirling.com/MainMenu/MainIndex/EthicsPolicy/tabid/1650/Default.aspx

Thank you ... that is going in the front of our board members books.

Chris, the Colorado Common Interest Ownership Act (CCIOA) via SB05-100 required HOAs to adopt certain Rules including one on Conflicts of Interest. Following is an example from one HOA

Rules and Regulations on Handling Board Member Conflicts of Interest

A conflict of interest occurs when a matter comes before the Board of Directors for consideration in
which a Board member has a familial or financial interest. If any action taken by the Board would
individually benefit a director or a member of their family, that director shall declare a conflict of
interest for that issue. The director shall leave the meeting room while the matter is discussed and
voted. They shall not participate in any discussion nor influence other Board members in any
manner and shall not vote on the issue. These restrictions shall not be construed to invalidate any
provision of the Declaration, or other documents that more strictly define conflicts of interest or
contain further limits on participation by a director who may have a conflict of interest. Any conflict
entered into in violation of this section shall be void and unenforceable and the Board member shall
be sanctioned.

To all,
This is another one of these subjects that come up every once in a while, it gets tossed around and then fades away until the next time.
There seems to be some sort of an attempt to prove you can't conduct business without this signed agreement that the Board must agree or business can't be done. But we know all boards don't require this, it is not a state requirement and some Boards don't even raise the question. There are some states that set specific rules for what can be discussed in Executive session and anything else goes to open meeting. But we know that some Boards ignore this and discuss "private" matters behind closed doors and don't report or notice Board business was discussed, plainly a violation of some covenants. We all elect people to the Boards and then try and restrict people actions and reactions. We know that personalities of the Boards can be different and management techniques are different.
We say on this site some matters should be withheld from the members because the Board is charged with protecting the association, and at some point those items that could not be discussed can now be discussed.

So, what's the answer? Maybe there is no question, maybe all this becomes part of the background noise and just discount that it happens or don't happen. I don't have any answer and I know we all will at one time walk away from some violation that we make the personal evaluation that to address it, is not worth it.

Glen,

Be careful what you say the BOD can do, especially in ES. AZ open meeting law would prohibit the board from discussing this issue in ES. Also is there a provision in the bylaws which says a member of the board can be censured and that a member can be excluded from a board meeting, whether an ES or not?

IMO, there is absolutely no action the board can take against a board member for violating either. First of all the BOD would have to have absolute proof of the violation and the board member deserves due process if being accused. Secondly, the board member can only be removed from the board by the members of the assn. And lastly, it would do no good to remove him from his officer position as he would still be on the board.

Frankly I think confidentiality agreements and conflict of interest statements are just "feel good" measures.

As a side note with regard to confidentiality agreements. Only matters that ARE confidential should not be discussed with non-board members. But, is that outlined in the HOAs gov docs and/or state law? And if so, does it say confidential matters "may" or "shall" not be discussed in an open session? AZ state law lists 4 topics which "may" be discussed in a closed session.

A simple search for CAI Code of Ethics found it:

https://www.caionline.org/HomeownerLeaders/ResourcesforHomeownerLeaders/G2G_ModelCodeEthics.pdf