Board Action and Operations (2nd of 2)

In our last post we shared the roles and responsibilities of Coop Board members. Today, we discuss the actions and operations of Coop Boards.

A number of fundamental principles govern Board action:

  • The Board must act as a group at Board meetings, not as individuals.
  • The Board can delegate authority to others (such as the officers and managing agent) but cannot delegate responsibility for actions taken (or not taken).
  • The Board has a fiduciary duty to the owners it represents to act in the owners best interests.
  • Following the correct procedure may be more important for a Board at times than making the right decision.
  • Board inaction may create more liability than Board action (i.e., doing nothing about a problem may get the Board into more trouble than doing something which turns out to be wrong).
  • Board action which complies with the governing documents and the law will usually be upheld as long as the Board acts reasonably and in good faith.
  • The Board should defer the day-to-day operations of the building to the Managing Agent– use the professional resources for which you are paying.
  • The Managing Agent provides information and feedback to the Board, the Board decides how to proceed, and the Managing Agent carries out the Board’s directives.

Failure to recognize and follow those principles can create problems for a Board, no matter how well-intentioned its actions.

Elected Directors should make decisions as a group at a duly called and noticed Board meeting. A president (or other officer or director) should avoid making major decisions without Board authority. If circumstances force a president to make major decisions without Board approval, the president should have the Board ratify (confirm) the decision as soon as possible-certainly at the next Board meeting.

The ideal Board is one that can work together toward the common goal of protecting and enhancing the Association. The rewards are few, but a well-run Coop is its own best reward.

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