Rules of Procedure, Codes of Conduct: Keeping it Civil & Getting Association Business Done

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By Jillian M. Wright, Esq.

Productive board meetings are productive business meetings. However, the issues handled by community association boards are not necessarily easy. Productivity can be sidelined by flaring tempers, controversy, interruptions and the challenges that come with addressing sensitive and sometimes complex matters. To successfully manage productivity and decorum issues that may occur at board meetings, a board should consider enacting procedural rules to govern meeting conduct. A board might also consider adopting a code of conduct applicable to directors and other association volunteers.

Rules of Procedure

While some associations’ governing documents specify a particular “order of business” or parliamentary procedure (e.g., Robert’s Rules of Order), most do not (and if they do, they are more likely prescribed for membership meetings, rather than board meetings). Thus, the majority of boards are left with little guidance on how to hold effective meetings which allow for efficient conduct of business and which also facilitate a healthy level of member input.

We recommend boards set forth standing procedures for meeting conduct. For example, establish  a “first, second, final warning” or similar system for admonishing those who interrupt board meetings,  set forth the process and criteria for recessing and adjourning unmanageable meetings, and set time periods and guidelines for member input. Such standing procedures for meeting conduct can help provide an atmosphere conducive to conducting business, preserving decorum, and facilitating member contribution.

It is, of course, still important to encourage member attendance and participation at meetings, so more members become interested and participate in community activities. Member participation mitigates accusations of a lack of board transparency and improves the board’s chances for achieving better long-term results for their community. However, the board must also be permitted to conduct business without unreasonable interference. Thus, owner participation should remain orderly and be limited to the portion of the meeting set aside for such participation, what we call “open homeowner forum.” An association is required by Civil Code §4925 to allow members to attend and speak at a board meeting.

 

Topics of Discussion

The Open Meeting Act restricts the ability of community association boards to take action on non-agenda items, albeit with certain limited exceptions. (Civil Code §4930) In certain respects, these restrictions can be helpful to boards challenged by meeting interruptions and by the temptation to engage in excessive dialogue with those in the “audience.”

However, items that are not on the board’s agenda often arise during the open homeowner forum. Civil Code §4930(b) allows the board to “briefly respond to statements made or questions posed” by members during open homeowner forum. Responses should be brief to inform the membership that the concern will or has been addressed by the board. If the board cannot address and/or decide on the issue at that meeting – either because of a lack of time or because it is not on the agenda – let them know of that constraint and inform them that the board will look into it in the future. Members want to feel heard and respected.

If the board’s response devolves into an argument or a back and forth with a member, inform the member that his or her time for comment has expired and that the board needs to attend to other board business. Board meetings for associations should be treated like board meetings at for-profit companies; it is a time to conduct business in a respectful and civil manner, not bicker about personal issues. This is difficult especially because members of a for-profit board do not have to live in a community together, a much more personal experience.

Codes of Conduct

Having a code of conduct for the board helps set forth expectations of board conduct, another way to help keep board meetings civil and efficient. While there is no statutory requirement for a director to execute a statement or agreement regarding ethics as a condition of serving on a board, many associations find such policies to be good general statements of what the board expects in terms of individual director performance. A code of conduct or code of ethics is something that could be used for both the board and members of an association’s volunteer committees. Professional and courteous treatment of fellow directors and of association management, employees (if any) and vendors is necessary to accomplish the business of the association, and to help protect the association and its directors from liability.

Codes of conduct can be helpful for things outside of board meetings as well. Codes of conduct vary in their exact content and level of detail, yet their provisions typically target three objectives: maintaining decorum, facilitating efficient business operations and fulfilling fiduciary duties. In addition to keeping meetings civil and accomplishing association business, the need for directors to fulfill their fiduciary duties must not be overlooked. Director duties of loyalty, confidentiality and fair dealing are owed by each director to the association as a whole and are assumed upon taking office as a director. Adopting and adhering to a code of conduct can thus help an association and its directors minimize potential liability.

Although the policies discussed above are operating rules, in that they apply generally to the management and operation of the association or the conduct of its business and affairs, they are not among the specified rules subject to the rulemaking procedures of Civil Code section 4360. Before adopting rules of procedure for board meetings or a code of conduct, a board should nevertheless consult with the association’s legal counsel to review its proposed rules and policies or to assist in drafting such rules and policies to suit the association’s particular needs and concerns.

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