Saturday, December 1, 2007

 

The Board of Directors sets and monitors policy. This long settled role of directors in corporate law is reflected in Florida Statutes Chapters 718 (condominium associations), and 617 (not-for-profit corporations), as well as in most association bylaws. Officers carry out that policy and serve at the Board’s pleasure. Officers are subordinate to the directors. Officers may be "fired" at the election of the Board. Directors may not be removed without a vote of the membership. In associations, removal of directors is done by recall. While the President may be sometimes confused with "dictator" that is not the President’s role in associations or any other corporation. As with any corporation, the President is an officer that reports to the board of directors – not visa versa. Ultimately, the board of directors reports to the owners.

In condominium associations the officers and directors of an association have a fiduciary relationship to the members who are served by the association. Florida Statutes Chapters 718 and 617 spell out the role of officers and directors a bit more explicitly. Here are some of the statute provisions that describe those roles:

The Role of Directors
Fla. Stat. §718.103(4) "Board of administration" or "board" means the board of directors or other representative body that is responsible for administration of the association.

617.01401 (2) "Board of directors" – means the group of persons vested with the management of the affairs of the corporation irrespective of the name by which such group is designated, including, but not limited to, managers or trustees.

Fla. Stat. § 617.0801 Requirement for and duties of board of directors. - All corporate powers must be exercised by or under the authority of, and the affairs of the corporation managed under the direction of, its board of directors, subject to any limitation set forth in the articles of incorporation.

The Role of Officers
Fla. Stat. §718.112 (2)(a)(1)
Administration.– The form of administration of the association shall be described (in the Bylaws) indicating the title of the officers and board of administration and specifying the powers, duties, manner of selection and removal, and compensation, if any, of officers and boards…. In the absence of provisions to the contrary in the bylaws, the board of administration shall have a president, a secretary, and a treasurer, who shall perform the duties of such officers customarily performed by officers of corporations. Unless prohibited in the bylaws, the board of administration may appoint other officers and grant them the duties it deems appropriate.

Fla. Stat. §718.112 (2)(a) - Unless otherwise provided in the bylaws, the officers shall serve without compensation and at the pleasure of the board of administration.

617.0841 Duties of officers —Each officer has the authority and shall perform the duties set forth in the bylaws or, to the extent consistent with the bylaws, the duties prescribed by the board of directors or by direction of any officer authorized by the bylaws or the board of directors to prescribe the duties of other officers.

617.0842 Resignation and removal of officers— (1)An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is delivered unless the notice specifies a later effective date. If a resignation is made effective at a later date and the corporation accepts the future effective date, its board of directors may fill the pending vacancy before the effective date if the board of directors provides that the successor does not take office until the effective date of the pending vacancy.

(2)A board of directors may remove any officer at any time with or without cause. Any officer or assistant officer, if appointed by another officer, may likewise be removed by such officer.

IN SHORT…
The Board of Directors sets the policies for carrying out the operations of the association – which operation must be consistent with the Declaration of Condominium. In corporations, officers report to the board of directors. The board of directors reports to shareholders. In community associations, the owners are the equivalent of "shareholders." That is why it is so important that association members take an active role in their community – ultimately, it is the members who decide how their association should be run.