What To Do About A Board Member Acting Out – Part I

Your governing documents, as well as Ohio law, impose duties on the Board and its members. Of course, the Declaration and Bylaws impose the duty on the Board to enforce and follow the covenants, restrictions, regulations, and rules contained in them. Because associations are also non-profit organizations, applicable laws governing non-profits also apply.

Ohio Revised Code § 1702.30(B) states that all Board members shall act in good faith, in a manner believed to be in the best interest of the association, and with the care that a similarly situated person would exercise. So what are a Board’s options in dealing with a Board member acting outside the purview of these guidelines? This will be the first of a series of articles detailing options available to a Board. One option is to impose a censure.

A censure is a formal reprimand of a director or board member in a corporate setting. Conduct worthy of a censure may include personal attacks against fellow board members, disruptions of meetings, breaches of confidence, interference with Association operations, breaches of fiduciary duties, etc. A censure is accomplished by a motion, approved by a majority of board members in a duly called meeting where a quorum has been established. The censure is recorded in the minutes and should reflect the specific reasoning for the censure, and the repercussions for continued behavior of this type.

While expressing strong disapproval of a Board Member’s behavior, a censure does not remove the Board Member from the Board nor does it impair the Member’s ability to attend meetings, make and second motions, or vote on motions, unless there is reason for recusing the Board Member from any discussions or vote, as described above.

The reasoning for censuring a Board Member, other than attempting to abate any ongoing problems, is that the Board Member’s behavior may create potential liability for the Association and other Board Members. If the Board sits by and allows a misbehaving Board Member to go unchecked, it could be viewed as an endorsement of the misconduct. In addition to moderating the unacceptable behavior, a censure may minimize or eliminate the Association’s potential liability created by the behavior, a censure may minimize or eliminate the Association’s potential liability created by the Board Member’s inappropriate actions.

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