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Proposed Bylaw Amendments


intrmom
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Our HOA's annual membership meeting is coming up in July and the President of the Board of Directors, acting as a member of the Association and not as President of the Board of Directors has offered 5 proposed bylaw amendments. Our current bylaw on removal of a director from the Board reads "(A) Any director may be removed for cause at any time at any regular Membership Meeting or at a special meeting of the members of the organization called for such purpose by the affirmative vote of  majority of the members present." He proposed to add (B) Removal for cause includes but is not limited to the following: incompetence; willful or gross misconduct; disruptive behavior such as threats, bullying others; insubordination and unruly conduct that impedes Board functioning; unethical, immoral or criminal conduct; lack of attendance; failure to perform duties or breach of fiduciary duty." His rationale is that current Bylaws provide no guidance as to the definition of removal for cause of a Board Director. This amendment remedies that and has been reviewed by the organization's attorney to meet legal requirements." I plan on moving to strike Paragraph B in it's entirety for several reasons. Most of the behaviors mentioned can and should be handled in the meeting when they occur.  If a director is engaging in disruptive behavior he should be called to order. If he fails to come to order he should be made to leave the meeting. What bothers me most is the amendment does not say who decides if a director is incompetent, disruptive, insubordinate, immoral, etc. I also have a nagging feeling that if the President has already talked to our organization's lawyer that he did not retain him acting as a member and pay for his legal advice but rather called him, contacted him via email or text and the billable hours will be charged to our organization. Would it be proper for me to ask him if he paid the attorney for this advice? This president is extremely controlling. We are a small board (12) and he debates every motion, makes many motions, and votes on every motion, never trying to show any impartiality.  He has been advised more than once that the Bylaws belong to the membership and not the Board of Directors but he continues to push things through. Help.

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Well, the latter complaints here can be dealt with by voting him out of office and/or raising points of order at the time of violations. So let's focus on the bylaw proposal.

First, note that no rule in RONR can definitively tell you what your bylaws should say, since your bylaws outrank RONR. That said, RONR gives advice, and we can give general advice based on our experience, but ultimately your organization decides what is in its bylaws.

I am not sure I agree with you that, by itself, the fact that a behavior can be dealt with by immediate discipline means it isn't a valid reason to remove a director. The board might prefer not to have its meetings taken up with disciplinary procedures for offenses in meetings, and to actually conduct business, so it might be a good idea to get rid of someone rather than continually voting to kick him out of meetings.

On the other hand, I'm not sure an-exclusive list of causes for removal is particularly meaningful. Certainly no one would think that it requires removal of anyone who does any of these things, even if only once (hopefully). It also doesn't require that one of these things be done before removing for cause. In short, it does just about nothing in terms of rules.

I'm not convinced, outside the corporate context, that cause requirements for board removal are a good idea. They expose the organization to litigation more than is necessary by providing an argument that removal violated the bylaws, and they don't encourage or discourage any particular removal. Things are different for corporations, and potentially for HOAs, so this might not be helpful input.

As far as legal requirements, we can't help you, we can only provide advice on bylaws as concerns parliamentary procedure. 

Finally, if the President has expended organization funds without authorization, whether by a bylaw or rule, or a vote by a body capable of giving authorization, then you have a few options. You can discipline the President, including demanding repayment. You can decline to do so and permit people to stick their hands in the treasury. I think the former is generally more useful, but it's up to your organization, via its disciplinary procedures. This could be a matter of interpretation - if, for instance, the President is authorized to consult with an attorney and bill the organization as needed, it isn't clear to me that there's anything wrong with doing so in the context of a bylaw proposal (even if he's making the proposal as an ordinary human, not the President). Suppose someone else gave notice of a proposal. I would think it would be proper for the President, if in doubt, to get legal advice, paid for by the organization, about the legality and legal impact of the change. The same, I think, would apply when the President writes the proposal.

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8 hours ago, intrmom said:

I plan on moving to strike Paragraph B in it's entirety

Well, if the proposed amendment is just to add paragraph B, then your motion should be ruled out of order, since it's the same as voting No on the proposed amendment. Argue and vote against the proposed amendment. One good argument is Mr. Katz' point that the amendment, a non-exhaustive list, is not really helpful.

8 hours ago, intrmom said:

What bothers me most is the amendment does not say who decides if a director is incompetent, disruptive, insubordinate, immoral, etc.

Well, the membership meeting would decide by the way they vote on removing the director. This is the same as the current situation: the meeting would vote and if enough members feel there is cause, they will vote to remove the director.

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

Well, if the proposed amendment is just to add paragraph B, then your motion should be ruled out of order, since it's the same as voting No on the proposed amendment. Argue and vote against the proposed amendment. One good argument is Mr. Katz' point that the amendment, a non-exhaustive list, is not really helpful.

17 hours ago, intrmom said:

Thank you. To be absolutely clear, I just want to amplify my remark that my argument may fail in the HOA context - but that is a question for the wisdom of the body.

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18 hours ago, intrmom said:

What bothers me most is the amendment does not say who decides if a director is incompetent, disruptive, insubordinate, immoral, etc. 

Intrmom,  without commenting on what I think of the amendment itself, I will just say that I don't believe it is necessary. It is the membership itself which decides what constitutes cause. You do not need to spell it out. It is a judgement call as to whether you want to spell out examples. It is quite common for bylaws to provide simply that an officer or member may be removed for cause, with no further elaboration as to what constitutes cause. If it is a body other than the membership, such as the board or a trial committee that is conducting the trial, then that body decides what constitutes cause.

It is also quite common for bylaws to provide that an officer or member may be removed with or without cause, again, without any further elaboration.

Edited by Richard Brown
Added last sentence to first paragraph
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19 hours ago, intrmom said:

"(A) Any director may be removed for cause at any time at any regular Membership Meeting or at a special meeting of the members of the organization called for such purpose by the affirmative vote of  majority of the members present."

I'd also point out that this existing language in the bylaw seems ambiguous at worst and awkward at best.  It appears to say that a special meeting is called by the affirmative vote of the members present, which I doubt is the intent.  I think it could be remedied by adding two commas

Any director may be removed for cause at any time at any regular Membership Meeting, or at a special meeting of the members of the organization called for such purpose, by the affirmative vote of a majority of the members present.

or by moving the vote threshold

Any director may be removed for cause by the affirmative vote of a majority of the members present at any time at any regular Membership Meeting or at a special meeting of the members of the organization called for such purpose. 

I also see that there is an article missing, and I question the wisdom of saying "at any time".  Do you really want such a motion to interrupt the normal order of business?  If so, there are already parliamentary ways to do so.

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