A: Initially, sharing such confidential information may qualify as a breach of the director’s fiduciary duty, subjecting that director to personal liability. Often a letter from association’s legal counsel reminding the director of his/her fiduciary duty can have an impact on the director’s future behavior. If you have recently restated your bylaws, they may provide that under such circumstances the board has the ability to remove the director from the board without a member vote. If you do not have this option, the board may be able to remove the violating director from a position as an officer (as president, secretary, etc.) if the individual is an officer and the bylaws allow for such removal. While removing a director from an officer position does not remove the director from the board, it does make a statement that the person may not serve in a position of greater responsibility.
The board may also censure the director. A censure is a statement of reprimand, criticism, and/or disapproval of a director. Again, while this will not remove the director from the board, it often acts as a strong reminder to the director that the board takes such matters seriously. If the board has adequate evidence that the director has indeed shared executive session information and the risk of the director continuing to share such information is great, the board could form an executive committee consisting of two or more directors (other than the director at issue) to address certain executive session subjects. If such a committee is formed, it should be set forth in a detailed written resolution outlining the purpose of the committee, the reason why it is being formed, and the scope of authority of the committee. – Carrie M. Timko, Esq.