Get 2 months of free community web site hosting from Community123.com!
Thursday, October 17, 2019
Get 2 months of free community web site hosting from Community123.com!
Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.
Subject: Soliciting your thoughts...
Prev Next
Please login to post a reply (click Member Login on the menu).
Author Messages
RandyS
(Colorado)

Posts:29


11/16/2005 6:29 AM  
Here is a fictional situation, please give your thoughts ...

Situation:

During a BOD meeting, an agreement is made that 2 of the directors (director "A" & "B") will abstain from voting and remove themselves from the situation, since they both will be affected, and a personal interest exists for both. So to be fair, it is agreed that the final decision on the matter will be left to the remaining 3 BOD's. Both directors agree and the situation is tabled. This is all recorded in the minutes, and a short time later the meeting is adjurned.

A day or so passes, and director "A" has a meeting with a key person involving the matter that is to be decided upon by the 3 remaining BOD's. Director "A" then contacts the director "B" and asks that they join discussion.

(Keep in mind, that both have agreed to remove themselves from the situation since a personal conflict seems to exist).

The director "B" joins director "A" and the other party. It is not known who requested the meeting.

A statement is made by director "A" to director "B", that they have made a personal request of the other party to withdraw an offer that had been extended at an earlier date.

The director "B" indicates that they are not comfortable with the situation, and reference what was agreed upon in a meeting that had taken place. The director "B" indicates that they feel the other BOD's should be present involving the discussion since they will be making the final decision.

The director "A" says that all the other directors are at work, and can not be reached. Later it is learned by director "B", that infact only 2 of the other BOD's are actually away during the day at work, the 3rd director (director "C"), was infact home and available for contact. Director "B" hadn't been provided with contact numbers for all the BOD's up to this point, and was assuming director "A" knew this as matters of fact.

It should be noted here also, that director "B" was recently instated to the BOD.

Has director "A" done anythting wrong?

Has director "B" done anything wrong?

Should this meeting have taken place? Why? or Why Not?

Is the offer that was extended still valid?

If you were director "A", what would you have done or not have done?

If you were director "B", what would you have done or not have done?

And any other thoughts you might think of...

Thank for the time


Randy
RogerB
(Colorado)

Posts:5067


11/17/2005 9:18 AM  
Randy, conflict of interests are raised by your ficticious example. Without specifics on the situation and how Directors A & B are involved, one can only speculate. My thoughts are:

1) When there is a conflict of interest, I believe Board members should not only abstain from voting but also should not be involved in any discussion or influence the other Board members in any manner (leave the meeting room during discussion and voting).
2) Directors A & B should not have met with a key person involved, unless was authorize by the other Board members. This creates, at the minimum, the APPEARANCE of possible wrongdoing.
3) Since this has already been done, then Board members A&B need to bring this to the attention of the Board and explain their actions.
4) The offer is still valid until such time as it withdrawn by the person/company making the offer. And if A and/or B are a party to that offer this is no conflict of interest. However, it creates an appearance of such; therefore the Board needs to obtain several sealed bids using a RFP and the basis of selection carefully documented IF that party is selected.
5) Board member "A" screwed up. They tampered with the offer by asking for it to be withdrawn.
6) Board members have a fiduciary responsibility and must be careful to act in good faith
7) Your Association and particulary Board members like "A" need good professional management guideance, protection under a "corporate shield", and good insurance coverage. As you are aware, we live in a litigious society.

Hope this helps,
Roger
RandyS
(Colorado)

Posts:29


11/17/2005 9:34 PM  
Roger,

Thank you vere much for your thoughts, In reviewing each point you made there, I agree that both directors A & B should remove themselves from all discussions involving a matter such as this, since it appears to be just as you outlined, a conflict of interest.

While I was inputing the situation, I was thinking about how to respond myself to it. I too thought it wrong of Director A, it would appear that there was something more there, but without knowing "everything" surrounding this it's really hard to tell.

I would think that the others board members should have been notified of any such meetings to take place. Makes me wonder what the position of these directors would be in relationship to the BOD.
If they were officers then that could make it look even more suspicious, at least to me anyway.

Thanks again for your thoughts, it's interesting to see how something like this is thought about.
You have to really enjoy the internet for making things of this type available to run through.

Randy
Please login to post a reply (click Member Login on the menu).
Forums > Homeowner Association > HOA Discussions > Soliciting your thoughts...



Get 2 months of free community web site hosting from Community123.com!



News Articles Provided by: Community Associations Network
News, articles and blogs about condos/HOA's

Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.







General Legal Notice:  The content of forum messages are from the posting member and have not been reviewed nor endorsed by HOATalk.com.  Messages posted by HOATalk or other members are for informational purposes only, are not legal or professional advice and do not constitute an attorney-client relationship.  Readers should not act upon this information without seeking professional counsel.  HOATalk is not a licensed attorney, CPA, tax advisor, financial advisor or any other licensed professional.  HOATalk accepts ads from sponsors but does not verify sponsor qualifications nor endorse/guarantee any sponsor's product or service.
HindmanSanchez Legal Notice:  (For messages posted by HindmanSanchez) This message has been prepared by HindmanSanchez for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Members of HOATalk.com should not act on this information without seeking professional counsel. Please do not send us confidential information unless you speak with one of our attorneys and get authorization to send that information to us. If you wish to initiate possible representation, please contact an attorney in our firm. Our attorneys are licensed to practice law in the state of Colorado only.

Legal Notice For Messages Posted by Sponsoring Attorneys: This message has been prepared by the sponsoring attorney for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Readers of HOATalk.com should not act on this information without seeking professional counsel. Please do not send any sponsoring attorney confidential information unless you speak with the sponsoring attorney or an attorney from the sponsoring attorney’s firm and get authorization to send that information to them. If you wish to initiate possible representation, please contact an attorney in the firm of the sponsoring attorney. Sponsoring attorneys that post messages here are licensed to practice law in a specific state or states as indicated in their message signature or sponsor’s profile page. (NOTE: A ‘sponsoring attorney’ is an attorney that is a HOATalk.com official sponsor and is identified as such in the posted message or on our sponsor page.)

Copyright HOA Talk.com, A Service of Community123 LLC ( Homeowners Association Discussions )   Terms Of Use  Privacy Statement