Recently in one of the linked in groups we are members of I ran across this explanation of how and why a board should act. It was submitted by Joel Meskin, Esq, CIRMS and is the most on point explanation I have ever seen. I am republishing this with Joel Meskin, permission. Read it and if you’re a board member you may want to rethink those informal board decisions and email votes we can’t seem to make go away.
Joel Meskin, Esq., CIRMS • The board is a "body." The board ONLY operates in its capacity as a board when the "body" is together in a properly noticed board meeting as has the proper quorum. The board makes decisions IN the board meeting and ONLY in the board meeting and then designates how that decision will be carried out at the board's direction.
Board members should remember that the indemnification obligation set forth in the association's governing documents is to indemnify board members who may be exposed to liability in their capacity as a board member. What they do outside the board meeting that is not specifically at the direction of the board to carry out a board decision IS NOT IN THEIR CAPACITY AS A BOARD MEMBER. Accordingly, the board member is on his or her own.
Also, the D&O policy only provides coverage for a board member in his or capacity as a board member. The board member should be very cautious of conduct outside of the board room, as he or she may be on their own to defend against a claim or lawsuit. As long as the board member has $10,000 to $50,000 to defend him or herself, then they can ignore this admonition.
The board should not conduct business via email, telephone, or any other method that is not expressly permissible by the governing documents or statute.
