If the HOA president’s role is misunderstood, the result can be very serious board dysfunction, as well as stress and risk for the president.
First, it is critical to understand that the role and power of the HOA president are dramatically different than that of a for-profit corporate president. The typical for-profit president is hired to be the boss and can hire and fire, create or terminate contracts and otherwise run the show. On the other hand, the HOA’s boss is not the president but is on the HOA board.
Corporations Code Section 7210 confirms the chain of command for HOA corporations – “the activities and affairs of a (non-profit mutual benefit) corporation shall be conducted and all corporate powers shall be exercised by or under the direction of the board.”
In a for-profit corporation, the day-to-day running of the business is typically the responsibility of the president, along with hiring and firing staff and vendors. However, in most HOAs, the day-to-day execution of board decisions is executed by the association’s professional manager, as is permitted by the same Section 7210.
The association president has just one vote on the board, and that vote is no more valuable than any other director. Directors who always automatically defer to the president are not fulfilling their responsibility to the association, which needs each director to contribute. So, “super-directors” do not exist in the HOA world – each director is just as important as each of the others.
HOA presidents often feel that it is their responsibility to instruct the HOA’s manager, employees or vendors on how they should perform their jobs, but they do not have the authority to do so unless the board gives it to them.
By taking the “boss” role, a president is often outside their authority and disrespects the board that is the actual authority. Furthermore, most boards hire professional managers and their role is to handle vendors and HOA employees.
Presidents who go beyond their role often experience burnout and frustration due to all the extra time they put in the job (unnecessarily, if the HOA has a manager). Worse yet, they are exposed to liability because they are no longer just making decisions (which directors do) but are actively supervising (which managers do). Such a president also could be acting without corporate authority and exposed to personal liability for corporate commitments made without board approval.
Good HOA presidents understand the boundaries between board work and management work. They act as team leaders, not dictators. They help lead the board as a team of equals to stay focused on the decisions at hand, moving deliberations along smoothly and efficiently, but also graciously, fairly, and respectfully. They model respect for all directors, even when they disagree, and set the tone of meeting conduct for all attendees.
HOA presidents are appointed in an open board meeting (no, presidents are not “personnel” so that does not qualify for closed session). Presidents normally serve at the pleasure of the board and may be replaced at any time and without cause in an open and properly noticed board meeting.
Good presidents are key to healthy associations and bad presidents bring discouragement, frustration, and risk to the manager, board colleagues, and themselves. So, keep the good ones!
Kelly G. Richardson, Esq. is a Fellow of the College of Community Association Lawyers and Partner of Richardson Ober LLP, a California law firm known for community association expertise. Submit column questions to [email protected].