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When should Directors also be Officers?


Ray Harwood
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When should Directors also be Officers?

More fully, perhaps: What advantages and disadvantages are there for directors being classed as officers (RONR p 572)?  To me it would seem that if a statement such as "Directors shall also be classed as officers" was added to our bylaws, the point would be moot (Wiktionary definition 3) and nothing would change.

The remainder is background primarily from another thread and details of my specific situation, for the morbidly curious.

Background

From the topic Voting out board members.

In that topic, there was some discussion about whether or not RONR says that "Directors are officers", with directors as used in section 49's discussion of an executive board (with other names possible), and officers as used in section 47.

In that thread, for background:

18 hours ago, Atul Kapur, PRP "Student" said:

2) This article of the bylaws applies to Officers; not all members of your board are necessarily officers so this would not apply to them.

18 hours ago, Josh Martin said:

RONR considers directors to be officers.

I asked for a reference to this, and several areas were mentioned (by those quoted here, and others):

14 hours ago, Joshua Katz said:

Page 461-62, ll. 32-33 and 1-4, respectively. 

14 hours ago, Richard Brown said:

On page 572 in the discussion about bylaws where it says as follows:  "Article IV: Officers. As stated in 47, every society should specify in this article of its bylaws the officers it requires, including honorary ones, and how they shall be elected or appointed. The officers rank in the order listed, so that the president should be named first, the vice-president or first vice-president next (unless there is to be a president-elect; see p. 457), and so on. Directors should be classed as officers. "  (Emphasis added)

Also see page 576: "Article VI: Executive Board (or Board of Directors). As explained on pages 481–83, all but the smallest societies usually find it advisable to establish a board whose members are the officers of the society, such a body being entrusted with administrative authority and responsibility to a degree that varies with the organization."

And finally on page 585 in the sample bylaws:  "Section 1. Officers and Duties. The officers of the Society shall be a President, a First Vice-President, a Second Vice-President, a Recording Secretary, a Corresponding Secretary, a Treasurer, and four Directors. These officers shall perform the duties prescribed by these bylaws and by the parliamentary authority adopted by the Society."

In each text mentioned, it seems to me that the notion of directors being officers is wholly optional:

  • The reference to page 461 line 32 is prefaced by line 31:  "Officers sometimes included..."
  • The reference to page 572: "Directors should be classed as officers."
  • The reference to page 576: "usually find it advisable to..."
  • The sample on page 585 works fine for when a society does want the directors to be officers, but it is not required to so classify them

Guest Zev and Richard Brown both added comments indicating "ultimately the society has the right to decide whether, under its bylaws, directors are officers", with which I agree.

More Details

My specific case is a homeowners association incorporated in the state of Arizona.  Our bylaws say (or perhaps "We have interpreted our bylaws to mean") that directors are not officers, since they are created/governed by separate Articles, and there is no specific statement that "the directors are officers".  Further, duties are allocated to the Board, but not to any individual director: "The duties of the Board shall include..."; and the separate article on officers states: "To the extent such powers and duties are not assigned or delegated to a Managing Agent [...], the power and duties of the officers shall be as follows", with subparagraphs for President, Vice President, Secretary, and Treasurer.

Since directors have no duties (other than to attend and participate board meetings -- and even that is implied), our interpretation has been that no director has any authority to act on behalf of the association outside of a meeting, though if a director also happens to be an officer, the powers and duties relevant to that office may be exercised outside of a board meeting.  Officers are explicitly (from the first sentence of the article on Officers and Their Duties) "principal officers of the Association", and not officers of the board.

I have a Bylaws document I can share, if anyone really wants to see it.

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13 minutes ago, Ray Harwood said:

My specific case is a homeowners association incorporated in the state of Arizona. 

I suggest your check Arizona law regarding homeowners associations and also, if you are incorporated, your corporation laws to see if there is a provision regarding the status of directors in state law.  Keep in mind that even if there is, there might be language to the effect of "unless provided otherwise in the articles of incorporation or bylaws".

Based on the additional information you provided in your last post, I'm still of the opinion that it is ultimately up to your organization to determine whether, pursuant to its own bylaws, directors are officers.

Edited to add:  I note with interest your last sentence of the last full paragraph which reads as follows: "  Officers are explicitly (from the first sentence of the article on Officers and Their Duties) "principal officers of the Association", and not officers of the board."   I note that it refers to PRINCIPAL officers, leading to the conclusion that the bylaws contemplate other officers, such as directors.  The principal officers of an organization are often referred to as the "executive officers" to differentiate them from directors... who are likely also officers.

Edited by Richard Brown
Added last paragraph
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1 hour ago, Ray Harwood said:

In each text mentioned, it seems to me that the notion of directors being officers is wholly optional:

  •  

I would agree except for the quote I provided, which I interpret to mean (take it for what it's worth) that there may or may not be directors, but if there are, they are directors.  I take the other quoted sections as meaning that it is a good idea for your bylaws to not change the fact that RONR makes directors officers, because if you do, you're going to spend a lot of time dealing with the differing terminology.

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32 minutes ago, Joshua Katz said:

I would agree except for the quote I provided, which I interpret to mean (take it for what it's worth) that there may or may not be directors, but if there are, they are directors. 

Are you sure you got that sentence right?  If the last word should be "officers" rather than "directors", I tend to agree.  If you mean for the last word to be "directors", my response is, "Well, duh. . . ."  :)

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5 hours ago, Ray Harwood said:

When should Directors also be Officers?

More fully, perhaps: What advantages and disadvantages are there for directors being classed as officers (RONR p 572)?  To me it would seem that if a statement such as "Directors shall also be classed as officers" was added to our bylaws, the point would be moot (Wiktionary definition 3) and nothing would change.

So far as I can tell, the only actual difference with regard to the rules of RONR would be that if the directors are not officers, a rule permitting election by plurality could be adopted as a special rule of order rather than a rule in the bylaws. It could theoretically also affect the rules for removal, but directors generally have defined terms of office, and in such a case it appears the rules are the same as for officers anyway. A particular organization may also have its own rules which refer to “officers.”

In any event, I concur with my colleagues that, so far as RONR is concerned, the directors are officers. An organization could provide otherwise in its bylaws, but as previously noted, RONR advises that they should be classed as officers.

“OTHER OFFICERS. In addition to the officers described above, an organization can provide in its bylaws for any other officers it may wish—including assistant officers. Officers sometimes included, and their usual duties, are:

Directors (or trustees, or managers), who sit as members of the executive board (49)—usually in addition to the other officers—and perform such duties as the bylaws may require. In some organizations the term trustees refers to officers who perform the duties of elected auditors (see pp. 479–80).” (RONR, 11th ed., pgs. 461-462)

I think the main advantage of this is simply that it simplifies things. If the directors are not officers, then they are a different category of thing, which presumably means different rules apply than for the officers. Unless this is intentional, such a divide is probably not desirable.

I do not think that the fact that the directors have no powers or duties as individuals has any bearing on this question.

Edited by Josh Martin
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