Board Directors & Officers

DON'T BE FOOLED: THERE'S NO HIERARCHY

Confusion about how volunteer homeowner Boards function is one of the greatest challenges facing common interest communities (CICs) because they are uniquely situated as hyper-local governments AND nonprofit corporations. Don't be fooled: even if your Bylaws include a statement to the effect that your Board chair or president is the "CEO",  community associations do not have a hierarchy of directors and officers.  

The express purpose of homeowner members electing multiple independent directors is to provide representative (ideally diverse) governance.  The entire Board -- and not any single director -- acts as THE executive decision-making body.  Otherwise great governance turns sour when one volunteer attempts to exert unilateral authority to compel action based on their personal judgment.  Directors of nonprofit common interest communities are peers with an equal voice, an equal vote, and an equal decision-making roleOur ethics page, the WA State Nonprofit Handbook and the CAI Board Member Toolkit summarize:


Community Association Board members are almost always uncompensated for their service.  WHY?


Governing documents typically provide authority for the Board to delegate specific and limited support functions ("powers") to: 


Support functions and governance functions are distinctly different.  Support actions can easily cross the line into governance without appropriate self-restraint and supervision.  Support functions must be surgically delegated, limited powers to facilitate operations and/or the execution of specific Board decisions.  Learn more about your state statutes.

READ: The Real Qualifications Needed On Your Board Of Directors | Board Compensation (hint: probably NOT)

GOVERNANCE & SUPPORT FUNCTIONS

The following are non-exhaustive examples of governance and support functions.

As a practical matter, CIC Boards spend considerable energy and time voting to act on choices related to dollars allocated in their annual operating budget because they do not take the time to implement policies, procedures and resolutions that automate and delegate support functions.  

Investing in policy-making pays long-term dividends.  Associations that delegate support functions set a path for success.  ANY committee or individual can fulfill a support function delegated by the Board.


BOARD Governance Functions


MEMBER Governance Functions


SUPPORT Functions

 N.B.  Support functions are often delegated to the community manager / CAM, committees, individual Directors, staff, etc.)

TYPICAL ROLES OF BOARD OFFICERS

What's the purpose of officer positions if no individual can exercise unilateral executive authority?

The purpose of officer positions within a community association Board can be boiled down to the following four points:


Most states require every volunteer director to abide by a duty of care and some also require a fiduciary duty.   Our example Bylaws include all of the Board officer information you see below.

Intriguingly, most bylaws never list roles or duties for at-large directors , but the truth is that every volunteer director has the same voice and vote.  Pigeonholing volunteer directors is the fastest way to eliminate the team-oriented nature of responsibility that's incumbent on your Board.  The Treasurer is not the only volunteer who should review your financials, nor is the President the only volunteer who leads the organization down the right path, nor is the Secretary the only volunteer who reviews and corrects meeting minutes. 

It's easy to start "turf wars" about who is individually responsible and forget that the Board is required to function as a team that makes decisions togetherDon't allow individual support roles for volunteer directors to get messy (see Governance & Support Functions above).   Thousands of comments from CIC volunteers across the United States suggest that communities suffer because of unilateral decision-making driven by a fundamental misunderstanding of the shared nature and implied teamwork model required of volunteer community governance.  

The CIC universe would be a better place if more statutes and governing documents emphasized the teamwork necessary to effectively govern.  Click here to learn more about amending and restating your governing documents.


The President

The President, subject to supervision by the Board of Directors, shall oversee rule and policy development and enforcement, conduct meetings, prepare agendas, and work with committees. The president is the official spokesperson for the board—to association Unit Owners, the Managing Agent (or management company), vendors, the press, and the greater community.  The President shall preside at all meetings of the Board of Directors and the Members, shall be responsible for carrying out the plans and directives of the Board and shall report to and consult with the Board. The President shall have such other powers and duties as the Board may prescribe.


The Vice–President

The Vice–President shall have all powers and duties of the President when the President is not available, and shall have such other powers and duties as the Board may prescribe.


The Secretary

The Secretary, personally or with the assistance of others, shall keep minutes of the meetings of the Board of Directors and the Members and shall arrange for Notice of such meetings; maintain other corporate records; attest all contracts and other obligations or instruments in the name of the corporation, when necessary or appropriate; and perform such other duties as the Board of Directors may from time to time designate.


The Treasurer

The Treasurer shall provide overall superintendence of Association funds and shall advise the Board of Directors The Treasurer shall oversee the care and custody, and be responsible for, all funds and securities of the corporation, and shall cause to be kept regular books of account and shall provide periodic financial reports to the Board of Directors. The Treasurer shall cause to be deposited all funds and other valuable effects in the name of the corporation in such depositories as may be designated by the Board of Directors. In general, the Treasurer shall perform all of the duties incident to the office of the Treasurer, and such other duties as from time to time may be assigned by the Board of Directors.


At-Large Directors

All of the above!


Read Always Ask "WHY?": Are Empathy and Reason YOUR Stars and Stripes?

WHO CAN SERVE AS A DIRECTOR AND OFFICER?

Members elect volunteers to serve on the Board.  The Board elects officers and appoints directors to fill vacancies.

State statutes and your own governing documents (specifically your bylaws) may include restrictions about who can serve.  Examples below.

Can a trustee serve on the Board?

If the grantor is the trustee then the grantor can participate, but further look to your declaration / CC&Rs and bylaws (the answer is less likely to be found in your state CIC statutes).  Here's an example definition that's particularly relevant:


"Unit Owner" includes any Board Member, officer, Member, partner, or trustee of any person, who is, either alone or in conjunction with another person or persons, a Unit Owner.

ADDITIONAL READING: Can A Grantor Be Trustee of His Irrevocable Trust?   |   Irrevocable Trusts Explained: How They Work, Types, and Uses

If the grantor is the trustee then the grantor can participate, but further look to your declaration / CC&Rs and bylaws (the answer is less likely to be found in your state CIC statutes).  RCW 64.90.410(2)(d) is a particularly relevant example:

(d) In determining the qualifications of any officer or board member of the association, "unit owner" includes, unless the declaration or organizational documents provide otherwise, any board member, officer, member, partner, or trustee of any person, who is, either alone or in conjunction with another person or persons, a unit owner.

Florida Qualifications

718.112(1)(d)(2) | Reference HB919 effective October 1, 2023 for Florida HOAs

Illinois Qualifications

Illinois Condominiums

765 ILCS 605/2(g):

765 ILCS 605/18(a)(1)

Texas Qualifications

TPC 209.00591BOARD MEMBERSHIP

(a)  Except as provided by this section, a provision in a dedicatory instrument that restricts a property owner's right to run for a position on the board of the property owners' association is void.

(a-1)  Notwithstanding any other provision of this chapter, a property owners' association's bylaws may require one or more board members to reside in the subdivision subject to the dedicatory instruments but may not require all board members to reside in that subdivision.  A requirement described by this subsection is not applicable during the development period.

(a-2)  Notwithstanding any other provision of this chapter, a property owners' association that governs a subdivision comprised of multiple sections may designate in an association instrument governing the administration or operation of the association a specified number of positions on the board, each of which must be elected from a designated section of the subdivision.  The instrument may require each board member representing a section to reside in that section.

(a-3)  A person may not serve on the board of a property owners' association if the person cohabits at the same primary residence with another board member of the association.  This subsection does not apply:

(1)  to an association with fewer than 10 residences; or

(2)  during a subdivision's development period to affect the eligibility to serve on the board of:

(A)  a person who cohabits with a developer of the subdivision regulated by the association; or

(B)  the developer.

(b)  If a board is presented with written, documented evidence from a database or other record maintained by a governmental law enforcement authority that a board member was convicted of a felony or crime involving moral turpitude not more than 20 years before the date the board is presented with the evidence, the board member is immediately ineligible to serve on the board of the property owners' association, automatically considered removed from the board, and prohibited from future service on the board.

(c)  The declaration may provide for a period of declarant control of the association during which a declarant, or persons designated by the declarant, may appoint and remove board members and the officers of the association, other than board members or officers elected by members of the property owners' association.  Regardless of the period of declarant control provided by the declaration, on or before the 120th day after the date 75 percent of the lots that may be created and made subject to the declaration are conveyed to owners other than a declarant or a builder in the business of constructing homes who purchased the lots from the declarant for the purpose of selling completed homes built on the lots, at least one-third of the board members must be elected by owners other than the declarant.  If the declaration does not include the number of lots that may be created and made subject to the declaration, at least one-third of the board members must be elected by owners other than the declarant not later than the 10th anniversary of the date the declaration was recorded.

CIC Stacked Venn - Owners Directors Officers

Some CIC bylaws dictate Model A: 



N.B.  Relatively few state statutes limit the creativity of volunteer director qualifications.  For example, Texas bars felons from serving.  Your association's bylaws may employ a blended model not displayed here.  


REMEMBER: Owners vote to elect and remove directors.  Directors vote to elect and remove officers.

Some CIC bylaws dictate Model B: 


REMEMBER: Owners vote to elect and remove directors.  Directors vote to elect and remove officers.

CIC Stacked Venn - Residents Owners Directors Officers
CIC Stacked Venn - The Public Directors Officers

Some CIC bylaws dictate Model C: 


REMEMBER: Owners vote to elect and remove directors.  Directors vote to elect and remove officers.

A NOTE ABOUT BOARD MEMBER EDUCATION

PLEASE DON'T PAY FOR BASIC EDUCATION. 

Revenue-based credentials for CIC volunteer leaders are not aspirational.  These credentials do not hold value in organizations where there are no standards for shared competence and compliance.  The real challenge, of course, is convincing three or more unique individuals to understand and abide by all of your CIC's statutory and governance requirements, including the thorny items like ethical codes of conduct.

Aside from CIC common expenses for services from vendors and staff (including the counsel of competent professionals), substantially all of the resources homeowner leaders need to successfully navigate their tenure guiding their community are absolutely free, EXCEPT for their time.  Many people forget to mention or properly value their own time and the time of others.  The amount of wisdom available from the greater CIC community is immense and quite a lot has been published -- for free -- to provide exactly the kind of examples and information individuals need to faithfully execute the duties of a nonprofit Director. 

There is a great amount of quality homeowner leader education available for free.  No organization -- especially business trade organizations like CAI -- are qualified to certify volunteer leadership for CICs by charging $99 to $199 for 4 hours of self-study material.  No amount of educational material will address core deficiencies in volunteer leadership.  The fix?  Motivated volunteer leaders who are willing to sacrifice their own time to learn and to improve their communities.

Given a tendency of many CICs to under-spend and avoid spending altogether for superlative results from competent third party resources combined with overtaxing volunteer leader time, it's a non-sequitur to conclude that CICs will benefit when their individual volunteer leaders pay for basic education.