Typically, boards are composed of five or more members. All members of the board are Directors and elected by the community at the annual member's meeting. Officer positions are determined annually by the board at the first meeting following the elections. A board often has more directors than officers. A homeowner can be both a director and an officer or just be a director. When making decisions on issues, each director has one vote.
As volunteers, board members are responsible for enforcing the CC&Rs, collecting assessments, and the maintenance of the common areas. In addition, they are also officer's of the association corporation and responsible for the management of the corporate business. This includes filing federal and state tax returns, corporation annual reports, paying property taxes, and maintaining accurate corporate records.
The board may hire professionals such as an attorney, reserve specialist, certified public accountant, insurance agent, or community manager to help them with these duties. However, the ultimate responsibility lies with the board. Under Arizona law, board members have a fiduciary duty to act in good faith and in the best interests of the homeowners.
Contract Between the Board and the Homeowners
The board of directors is required to comply with the governing documents as well as federal and state laws. The Bylaws and CC&Rs are contracts between the association and the homeowners. Homeowners agree to comply with various rules and pay monthly assessments. The board of directors agree to act in the best interest of the community. If the board of directors fails to comply with the governing documents, it is considered a breach of contract and a breach of fiduciary responsibility.
The President is responsible for ensuring the board members fulfill their fiduciary responsibilities. Likewise, the members of the board are responsible for ensuring that the President fulfills his/her fiduciary responsibility.
If board members become aware of improper conduct such as abuse of authority or misappropriation of funds and fail to act, they may be considered complicit in the improper activities. Misappropriation of funds may be considered a criminal act in the state of Arizona.
Qualities of a Good Board Member Courtesy of the Community Association Institute, Inc.
A Strong Board Member
A Weak Board Member
Good Character
Unable to put the welfare of the community first.
Strong Integrity
Works behind the Board to run things his/her way.
Calm Judgment
Impulsive or quick tempered.
Willingness to Serve
Has a personal or hidden agenda.
Committed to the best interests of the community as a whole.
Puts individual interests first.
Previous Volunteer Service
Little or no experience in management, leadership, or service.
Strong "People Skills"
Unable to work with others for the common good. Ineffective with others.
Board Basics - Every board member can benefit from these tips:
Select a President that has good leadership and management skills.
Rely on the advice and recommendations of professionals such as an attorney, certified public accountant, insurance agent, and a reserve specialist.
Read and understand the governing documents and the Arizona Revised Statutes for Planned Community and Corporations.
Educate yourself. Find out what is required to be an effective board member.
Listen to the community. Don't view your board position as a position of power but rather as one of service.
Don't micro manage the committees or the community manager.
Don't get caught up in the wants and desires of special-interest groups.
Look at the big picture.
Work toward achieving the goals and adhere to the mission statement of your community.
Work together. Be respectful of your fellow board members' opinions and decisions. Some votes won't be unanimous, and that's okay. It's not personal - it's just business.
Conduct yourself in a professional manner. Board meetings are not social events or an environment for vendettas.
Relax. Don't take everything - including yourself - so seriously. You're merely a homeowner volunteering your time.
The Dangers of Untrained Board Members
For a homeowner who has been persuaded to run for the board, the questions that most likely will come to his or her mind are:
How much time is this going to take?
What is expected of me?
Why is it necessary to read through that stack of papers I see in front of the board members at their meetings?
As a homeowner, I make decisions all the time -- how is this new role different?
Well, it is different. As a board member, you must not only know the CC&Rs, rules and regulations, and bylaws of your association, but also the state legislative statutes, which take precedence over your governing documents. And with each legislative session, you can count on more laws being enacted.
Under-educated, under-informed board members who stumble into their roles often don't realize the disastrous consequences of their actions until it's too late. Unhappy owners may complain to whoever will listen, including the local press.
The best defense for a board member is to be up-to-date on issues in local government affecting associations, state-level activities, proper procedures in board governance, and so on. It also helps to have a healthy respect for Robert’s Rules of Order, which can lead to more-productive and less-contentious meetings with your owners.
It may seem like an awful lot for a volunteer to do and keep track of, but if they stay informed, your board members have a better chance of making a positive impact on the community.
Marilyn Brainard has served on the board of Wingfield Springs Community Association, in Sparks, Nevada, and is a member of the CAVC.
Association Times is credited as the source for this article.
