The Board of Directors is charged with making the important decisions of the association. Whether it’s hiring a management company to deal with the day-to-day affairs of the association or making the tough decision to pass an additional assessment to cover the cost of an improvement, the actions of the Board affect every member of the association. Many, if not most, Boards get along famously. But there are Boards that don’t get along. Often, the cause of strife is easily identifiable: the Rogue Board Member.
Identifying the Rogue Board Member
The Rogue Board Member is not simply an individual who holds strong beliefs or engages in heated arguments. The Board Member who challenges groupthink or argues for unpopular viewpoints is not a Rogue Board Member. Differing opinions and spirited discussions are desirable on a Board that takes its responsibilities seriously rather than rubber-stamping the decisions of one or two strong leaders.
The Rogue Board Member may be self-interested, nefariously intentioned, or a well-meaning but misguided individual. Examples of the actions of a Rogue Board Member include:
- Failing to attend meetings
- Disregard for the governing documents
- Disrupting meetings by using personal insults or shouting other members down
- Disseminating Board information without consent
- Taking action without Board approval or in conflict with a Board decision
- Hiding or stealing money from the association
The actions of a Rogue Board member span the spectrum from general incompetence to malice. However, the well-intentioned Directors and the association have a range of options that can be employed to control such actions.
Code of Ethics, Behavior, and Conduct
A simple action that can be taken by all Boards, including those without a current Rogue Board Member, is the adoption of a Code of Ethics, Behavior, and Conduct. To make the responsibilities and expectations of Board Members clear, the Board of Directors can adopt a Code of Ethics that must be executed by all Directors. The Code of Ethics will be part of the Association’s rules and regulations, and a violation would constitute a violation of the Condominium Documents and potentially a breach of a Director’s fiduciary duty to the association. A Code of Ethics puts all Board Members, current and future, on notice of the association’s expectation of their conduct and allows the Board to cite a specific policy in pursuing some of the actions listed below.
The Code of Ethics may include ethical standards such as:
- No Board Member shall seek preferential treatment by the Board or its agents.
- No Board Member shall use the resources of the association to enhance or protect a private interest.
Examples of behavioral rules include:
- Board Members shall conduct themselves in a professional and businesslike manner at all meetings.
- Board Members shall maintain confidentiality of all matters involving the association.
- Board Members shall not interfere with the duties of management staff.
The mere discussion of a Code of Ethics and what it might entail may help resolve some of the issues that an association is having with a Rogue Board Member.
Personal Interaction
A direct, personal approach may be all that is needed to quell the actions of a Rogue Board Member. This initial interaction should be one-on-one with another Board Member approaching the Rogue Board Member. The conversation could be in person or via e-mail, but should always include specifics and a request for action:
- “We haven’t seen you at the last few Board meetings. Perhaps you just don’t have the time to commit to this right now. Have you considered resigning so the Board can find an individual able to provide more time and assistance?”
- “It’s hard for other Board members when you personally intimidate or insult them. Please conduct yourself in a more professional manner at the next meeting.”
- “I respect your strong opinion about this Board decision, but we can’t keep debating the matter. The Board has made its decision and needs to attend to the other business of the association.”
Establish a Record of Disapproval
If a Rogue Board Member has been asked to change their behavior without results, the Board must now consider taking additional steps to control their behavior. It is imperative that the Board establish a record of conduct it finds objectionable. The Rogue Board Member should be issued a written warning about such conduct with a copy of the warning kept for the association’s records. The warning should:
- Identify the conduct with reference to the Code of Ethics if possible.
- Demand that the conduct cease immediately.
- State that the Board does not condone the member’s conduct.
Additional written warnings should be given as needed. Establishing a record of the Rogue Board Member’s conduct and the Board’s response is vital to protecting the Board and the association in the event that legal action must be taken or if suit is instituted against the Board due to the Rogue Board Member’s actions.
Censure
If a Rogue Board Member persists in bad behavior after repeated private warnings, both personal and written, the Board could seek to censure the Director. Censure is a public document that reprimands the Rogue Board Member and can be noted either in the public minutes of the association or brought to a vote of the Board at a general meeting of the association. Censure should include the specific conduct objected to and the consequences of failing to change the conduct, such as calling a special meeting of the association to have the rogue member removed from the Board.
Censure is not a decision to be made lightly or without offering the Rogue Board Member the opportunity to respond to the charges being made. As a public, written condemnation of the Director’s actions, censure could lead to allegations of libel or defamation and has the distinct possibility of prompting a lawsuit from the condemned. However, in the proper case, censure can be an additional tool for establishing a record of disapproval.
Recall Election
If written warnings are unsuccessful, the Board should demand the resignation of the Rogue Board Member under threat of removal. The Board should consult its Bylaws concerning the process for removing a Director. Most Bylaw provisions state that a Director can be removed at either a special meeting or an annual meeting of the association. If removal cannot wait until an annual meeting, the remaining directors may have to call a special meeting of the association. The Bylaws should provide that a special meeting may be called upon a majority vote of the directors. At an annual or special meeting, a proscribed number of votes will be necessary to successfully remove a director. Some governing documents merely require a simple majority of those who cast a vote, while some may require a vote of more than 50% of all of the owners in the community. At a recall meeting, the Rogue Board Member subject to removal should be provided an opportunity to speak.
Removal by Court Order
This is the most drastic action that an association may pursue to remove a Rogue Board Member. MCL 450.2514 of the Nonprofit Corporation Act allows the Board of Directors, or 10% of members, to file suit for the removal of a Board Member in the case of fraudulent, illegal, dishonest conduct or a gross abuse of authority or discretion. Such an action must be filed in the circuit court of the county where the association is located.
Seeking a court order removing the Rogue Board Member can be time-consuming and costly. The burden of proof will be on the association. Board Members may be subpoenaed for depositions or called to testify as witnesses. Such a court action may be required in the case where a Rogue Board Member stole money or caused other harm to the association but refuses to resign. If this action is successful, the circuit court can also bar the Rogue Board Member from serving for a period of time.
The role of the volunteer Board Member is often a thankless one. The job is not made any easier by having a Rogue Board Member cause internal conflict among Directors. A Board should express its disapproval for a Rogue Board Member’s actions early and often to avoid the costly solutions of a recall vote or removal by court order.
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Author
Benjamin J. Henry
Reprinted with permission from MAGWV – Condominium & HOA Lawyers, Michigan