The Controlling Director

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How many of us have experienced the board member who wants to control all aspects of his or her community association's operation from finances to personnel to housekeeping? This controlling person just doesn't want to accept that there is a division of responsibility in the operation of an association.

How do you handle such an individual and keep the association out of trouble?

The answer lies within legal and insurance purviews. A controlling director may volunteer to serve as the manager without compensation. As such, he would not be covered by the association's workers compensation insurance in the event he is injured. If he were to receive payment for his services, then many governing documents and state statutes require that he no longer serve on the board. The board's decision should be easy: do not allow a board member to serve in an association-related role that is in any way connected to employment, and approve a resolution agreeing not to hire board member to avoid any perception of a conflict of interest.

In the absence of a professional manager, this controlling director may feel that the janitorial and maintenance staff was sadly lacking. Thus, the director could be on hands and knees scrubbing the lobby floor or hammering away at a loose fence board. There would still be no workers compensation coverage to protect him in the event of an injury. Even worse, a resident could slip on the wet floor and the association would be liable for the injury.

From the legal perspective, a controlling director could micromanage every decision, every action of his colleagues on the board and of the manager. Rather than respecting the expertise and knowledge of the manager, he insists that he knows more about everything and demands that things get done his way. He micromanages every decision and action of the manager and the onsite staff, interfering with the manager's contractual and fiduciary obligations and creating an environment of suspicion, fear, discontent and apathy. Homeowners, contractors, suppliers, the management company, even other board members could sue him for improper employment practices, inappropriate directions, and failing to act in the best interests of the community.

How does one handle the controlling directors of the world?

The other board members need to understand the legal and financial ramifications of allowing this type of behavior to continue. The manager should address the facts and the issues, focusing on the harmful effect on the community and the board if the controlling director's unreasonable demands are allowed. It's certainly a sensitive issue, and either a private meeting among board members or an executive session would be the appropriate venue for conversations with the controlling director regarding his behavior. After all, he thinks he's acting in the best interests of the community, so his fellow board members need to be cognizant of his mindset and address him with respect and appreciation for his sincere albeit misguided efforts.

If the controlling director does not heed his colleagues' and manager's entreaties to reform, the other board members should ask for his resignation. If the controlling director refuses and continues to behave inappropriately, the recourse of last resort is to call for a special meeting for the purpose of removing the director from the board.

Controlling board members may not realize the detrimental impact they have on their community, but their actions can result in litigation, a dysfunctional board, and the owners ready to revolt. Understanding the unique role and responsibilities of community association board members is absolutely essential to ensuring the successful operations of the association.

 

Source: Association Times
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