BOARD ROLES & RESPONSIBILITIES
KEY FIGURES IN A COMMUNITY ASSOCIATION
Community associations are composed of different groups of people working together to manage the association. To effectively run a community association, association leaders must understand the roles and responsibilities of each group and how they interact. The key players in the administration of a community association are: the board of directors, officers, owners, committee members and the management company.
THE BOARD OF DIRECTORS
Owners elect the board of directors at the annual meeting. The board of directors serve without compensation unless the bylaws of the association provide to the contrary. The board manages the community in accordance the authority found in the community governing documents. Some examples of powers vested in the board are the following:
- Establish sound fiscal policies and maintain accurate records
- Develop a workable budget while balancing requirements and expectations of the community
- Establish reserve funds
- Levy and collect assessments based on budget needs
- Establish, publicize, and enforce rules and penalties
- Maintain and repair the property
- Architectural control enforcement
- Authorize legal action against owners who do not comply with the rules
- Review local laws before passing rules or sending bylaws to membership for approval
- Appoint committees as needed and delegate authority to them
- Provide adequate insurance coverage, in accordance with the bylaws and local governmental agencies.
- Inform owners of important board decisions and transactions
- Conduct annual meetings and regular board meetings
The governing documents (usually the bylaws or articles of incorporation) have provisions which relate to officers. Officers of associations are elected by the board of directors. The board consists of the following officers: president, vice-president, secretary and treasurer. In almost all cases, the Board of Directors and the Officers are one in the same. Once the Board of Directors are elected by the association members, the established board appoints Officer positions.
Each officer of the board has specific responsibilities. These responsibilities may differ between Associations and specific responsibilities can be found in the community Governing documents. Key responsibilities include:
The president is the Association’s chief executive officer. Responsibilities include running board and general membership meetings and setting goals. Some documents give presidents the right to appoint committee members. The president may occasionally negotiate contracts, sign contracts and other documents, and oversee their fulfillment.
VICE PRESIDENT/VICE CHAIRMAN
The vice president performs the president’s duties in his or her absence and often handles special projects.
The treasurer works with the manager and finance committee (if appointed) to develop the budget. Responsibilities also include monitoring Association financial activities, overseeing insurance policies, investing assets, maintaining reserves, and coordinating a year-end audit.
The secretary is responsible for preparing and distributing meeting agendas and minutes. The secretary also maintains the association’s official records (or supervises their maintenance).
FIDUCIARY RELATIONSHIP AND RESPONSIBILITY
In all cases, the Board has a fiduciary relationship with the members of the association to act in good faith and in the best interest of the community association. This means that Board Members must exercise due care and diligence when acting for the community, and it requires them to act within the scope of their authority.
The fact that the Association is a not-for-profit corporation, or that the members of the Board are volunteers and unpaid, does not relieve them from the high standards of trust and responsibility that the fiduciary relationship requires.