(We blogged about this nearly 3 years ago, but in light of recent events, it bears repeating.) Here’s an issue that comes up every week in my practice for the past 30 years or so. I get a call from someone on a Board of Directors. And they tell me that they have a President on the Board who is a real dictator. He or she doesn’t listen to any other board member, makes decisions on their own, signs contracts, sets policy, hires and fires people — all without input from the other board members. Again – I get calls like this once a week at least, especially during election season.
So does the president of a board have any power above and beyond other board members, or are they simply on par with the other board members?
Well……….let’s look at some arbitration decisions……(A single director has no power to act in a representative capacity for the corporation on matters for which a vote of the directors is required.); June Katchen and Lawrence Katchen v. Braemer Isle Condominium Association, Inc., Arb. Case No. 98-5485, Final Order (August 5, 1999) (Association president, acting alone, did not have the authority to act for the board and bind the association).
In point of fact, an association president has no greater authority than any other member of the board. See Aldrich v. Tahitian Gardens Condominium Association, Inc., Arb. Case No. 96-0472, Summary Final Order (May 22, 1997). The president has no power to take action on behalf of the association in the absence of a specific order or resolution of a majority of the board.
Your bylaws may allow the President to chair the meetings and sign contracts that have already been approved by the board, but that’s about it.
So while it’s clear that a president has no greater authority than any other director, suppose that president doesn’t stop acting like a dictator? What should the board do? Well remember, the officers of the Board serve at the pleasure of the Board of Directors. The Board always has the right to call a new Board meeting / organizational meeting — and remove that person as President. No big deal. But even if they remove that person as president – that person still remains as a member of the board. The unit owners can have a recall and remove that person completely from the Board – but the Directors can very easily remove that person from the President’s spot — and then hopefully – problem solved.
I have to say that I’m still surprised by some of these calls and how one person can sometimes bully a whole board or even a whole community. Why don’t people fight back with simply removing that person from the Presidency? It’s a heck of a lot easier than doing a recall.