North Carolina/ How Do You Get Officers Removed?

I live in NC. We have 6 board members. The President, V. President and Treasurer are not fulfilling their roles as elected. Our officers are all voluntary. Upon attending many meetings and realizing the agenda is to not enforce our covenance across the board, to omit the 2 board members from meetings, that just happen to be people of color, and facing responsibilities of pretty much all of the board members w/ titles, i.e. mentioned above: How would one handle disclosing this information to the rest of the homeowners tactfully? I have recently put some issues on the table, concerning the above matters, and am now being chastised, or ignored from the other listed board members. I would like to remain on the board, but feel the others should be replaced. How does that happen? Right now they are unhappy with me because I have called them out on inappropriate actions and have asked that the treasurer either step up and be the treasurer or be replaced. And because I have shared this w/ some homeowners the other officers are upset. What would you do? We are currently involved in a civil lawsuit and we need strong, firm representatives in place, that are not biased, are motivated, not racist, and are willing to enforce the covenance.
Any help or suggestions out there would be greatfully appreciated..

Suzette,
Of course Roger is right in what he says and he is speaking of some serious conditions. It should be noted that you, and the Board members that have been excluded from meeting are also part of the Board and may be included in any actionable suit that may be brought against the Board. So, I would advice you to talk to these other two members and see if you couldn't have a serious talk with the other board members and explain clearly, as Roger suggests, that their actions could result in all the Board being charged. I am sure when and if this happens the court will assign blame and you all would not be charged. But #1, you don't want another suit, number #2, you sure don't want to be a part of it. If, you can't get the Board to consider what their actions could lead to, and you can't get the support necessary to recall, I would seriously consider resigning and documenting your reasons for the record. Anything that could happen in the future that damages you could prove actionable on your part.
IMHO

Martha, I agree with one exception to every item in your post. The one exception occurs when one or more Board members KOWINGLY do wrongdoing. Then the corporate shield can be pierced and insurance coverage is excluded.

I would not immediately resign for fear of being sued. I would first try to correct such bad conduct. Board members who do not want to be included in improper conduct which could lead to law suits do need to protect themselves. This can be done by making motions and voting to show they are acting in good faith. And when there is a motion which a Board member believes is "not acting with good business judgement" they should oppose the motion and demand their name be listed in the minutes as opposed to the motion.

Roger, I took it that she was asking how to remove an officer of the HOA corporation. I only included the insurance part in case they were acting in a manner, not criminal, but just not as appreciated by some shareholders or other officers.

You are correct that anyone acting in a way other than in the best interest of the corporation may face legal action.

This is from NCGS 55-66-2

(b) Unless otherwise provided in the articles of incorporation, a shareholder of a corporation is not personally liable for the acts or debts of the corporation except that he may become personally liable by reason of his own acts or conduct. (1893, c. 471; 1901, c. 2, s. 22; Rev., s. 1162; C.S., s. 1160; G.S., s. 55‑65; 1955, c. 1371, s. 1; 1969, c. 751, s. 28; 1989, c. 265. s. 1.)

§ 55‑8‑57. Additional indemnification and insurance.

(a) In addition to and separate and apart from the indemnification provided for in G.S. 55‑8‑51, 55‑8‑52, 55‑8‑54, 55‑8‑55 and 55‑8‑56, a corporation may in its articles of incorporation or bylaws or by contract or resolution indemnify or agree to indemnify any one or more of its directors, officers, employees, or agents against liability and expenses in any proceeding (including without limitation a proceeding brought by or on behalf of the corporation itself) arising out of their status as such or their activities in any of the foregoing capacities; provided, however, that a corporation may not indemnify or agree to indemnify a person against liability or expenses he may incur on account of his activities which were at the time taken known or believed by him to be clearly in conflict with the best interests of the corporation. A corporation may likewise and to the same extent indemnify or agree to indemnify any person who, at the request of the corporation, is or was serving as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise or as a trustee or administrator under an employee benefit plan. Any provision in any articles of incorporation, bylaw, contract, or resolution permitted under this section may include provisions for recovery from the corporation of reasonable costs, expenses, and attorneys' fees in connection with the enforcement of rights to indemnification granted therein and may further include provisions establishing reasonable procedures for determining and enforcing the rights granted therein.

(b) The authorization, adoption, approval, or favorable recommendation by the board of directors of a public corporation of any provision in any articles of incorporation, bylaw, contract or resolution, as permitted in this section, shall not be deemed an act or corporate transaction in which a director has a conflict of interest, and no such articles of incorporation or bylaw provision or contract or resolution shall be void or voidable on such grounds. The authorization, adoption, approval, or favorable recommendation by the board of directors of a nonpublic corporation of any provision in any articles of incorporation, bylaw, contract or resolution, as permitted in this section, which occurred prior to July 1, 1990, shall not be deemed an act or corporate transaction in which a director has a conflict of interest, and no such articles of incorporation, bylaw provision, contract or resolution shall be void or voidable on such grounds. Except as permitted in G.S. 55‑8‑31, no such bylaw, contract, or resolution not adopted, authorized, approved or ratified by shareholders shall be effective as to claims made or liabilities asserted against any director prior to its adoption, authorization, or approval by the board of directors.

(c) A corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the corporation, or who, while a director, officer, employee, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee, or agent, whether or not the corporation would have power to indemnify him against the same liability under any provision of this Chapter. (1955, c. 1371, s. 1; 1969, c. 797, s. 1; 1973, c. 469, s. 5; 1985 (Reg. Sess., 1986), c. 1027, ss. 35‑38; 1989, c. 265, s. 1; 1989 (Reg. Sess., 1990), c. 1024, s. 12.14.)

Martha

CcA,

You might try requesting a hearing before the Board and explain that just as you must abide by the covenants, so must others. You understand the need for extensions but an indefinite extension is unwarranted for anyone. See what happens.

BTW, its typically better to start a new topic than to revitalize one that is over 3 years old. This is mainly because laws change and what might be a valid answer three years ago might not be today.