Down to Earth: Omnipotent Boards & Unilateral Decision-Making

Like Neo flexing in The Matrix, the common interest community (CIC) universe abounds with individual volunteer directors, entire volunteer Boards, community association managers, staff and even attorneys acting with a peculiar tilt toward omnipotence. Statutes and governing documents bend to their will – or so they believe – because they are in a position of authority.

Omnipotence takes many forms. In preparation for this article, I asked managers and homeowners to share examples from their communities:

• “Rules for thee, not for me.” - Board members for whom rules do not apply
• “The board can vote to override the Bylaws.” - Quote from a Board meeting
• “I won’t be around anyway by then.” - Quote from a Board meeting
• “If you don’t like it, move!” - Quote from a Board meeting
• Signing contracts unilaterally (without Board approval)
• A quorum of directors meets in private to address association business
• Using executive sessions to obfuscate discussion about topics that are statutorily required only in open meetings
• Managers and staff tell homeowners that they should ask the Board to consider proactive variances to written governance such as fee schedules, collection policies, rules and regulations, etc.
• Eschewing homeowner input and official committee recommendations
• Creating amendments to CC&Rs to avoid association responsibility and shift the shared costs of deferred maintenance onto individual owners
• “Board members serve lifetime terms unless they resign.” - Quote from an annual meeting. The community manager was present and said nothing.
• "There is no reason for us to hire a Reserve Study contractor for several thousand dollars if we trust our own estimates [that would be one person's estimates] of how long our existing capital assets will last and what it will cost to replace or maintain them when needed…”
• Single-handedly appointing additional volunteer directors to the Board.
• Rolling surplus funds into reserves without a vote of the members
• Complete lack of enforcement of the governing documents
• Presidents acting as dictators with unilateral authority

Countless homeowners and volunteer leaders have shared that omnipotence

Is omnipotence running rampant in your community?

Omnipotent actors might convince themselves that their actions are benevolent and beneficial: a kind, yet decidedly false narrative. They often suffer from a serious case of YDKWYDK (you don’t know what you don’t know) that may be coupled with UTLAC (unwillingness to learn and change). Intent matters from a legal perspective related to volunteer director indemnification, but intent alone does not absolve the negative impacts of errant judgment that ties your organization in knots. Ignorance, arrogance and incompetence are close companions of omnipotence.

Individual directors, the entire Board, your community association manager, staff and legal counsel are tasked with upholding the requirements of statutes and governing documents, NOT orchestrating ‘workarounds.’ Requirements depart like lemmings off a cliff once omnipotence takes hold. There is no One Ring, nor are any of the aforementioned persons empowered with unilateral decision-making authority to govern your community. Do you know the limits of: 1) your individual authority and 2) your Board’s authority? What about the authority provided to your manager/management company? Have you reviewed your contract?

The hierarchy of governance begins with statutes, ordinances and interpretative case law, then your declaration and bylaws (often including references to Robert’s Rules of Order), then your rules and regulations, policies, procedures and resolutions and, at long last, the decisions of your Board bound by all the aforementioned elements. Acting ethically and honoring your duty of care and/or fiduciary duty to serve your community brings this hierarchy into focus. That’s your Primary Directive! Follow your North Star.

In addition to specific language that directly provides for interpretation and intervention relative to a limited number of situations, Boards generally possess a certain level of discretion especially when it comes to enforcing the governing documents. Board discretion should never be confused with an omnipotent ability to grant wishes and/or act contrary to written governance. Discretion almost always comes as a response or reaction, not a prophylactic.

Did you enjoy this article? Check out What to Do: When Things Go Askew.

Omnipotent God and Earth image by Alfons Schüler from Pixabay
Superhuman image by BedexpStock from Pixabay
Arms and Hands in Knots by Stable Diffusion v1.5
Kermit image by Alexa from Pixabay