Board of Directors overrule/reverse something HOA voted on?

[Dan Honemann]

On 8/20/2022 at 9:52 AM, Augustin said:

Rob Elsman,

Where Bylaws and state law conflict with RONR, RONR says the Bylaws and state law trump RONR. This is obviously a part of RONR and so IMO, this is worthy of bringing up. Facts:

• Every HOA and COA is a corporation.
• Every HOA and COA is a stock corporation, meaning it has shareholders.
• Every single state has a statute requiring each corporation to have a board.
• Every single state has a statute vesting either the Board or the membership with the authority to makes decisions pursuant to state law and the HOA/COA's governing documents.
• A corporation's Bylaws, Articles of Incorporation (AoI), and Declaration are a contract. This contract binds all members of the stock corporation together in agreement that all will follow the terms of the Bylaws, AoI and Declaration.
• RONR distinguishes often between its rules for (1) a non-stock corporation or non-stock entity and (2) a stock corporation. 

When the membership attempts to countermand a corporate board decision, and either the Bylaws, Declaration, Articles of Incorporation do not reserve this power to the membership on the subject where the membership wishes to exercise this power, then I see two problems within the scope of RONR: First, the Board always has the right to reverse the membership decision, pursuant to the higher authority of the Bylaws and state law and what the Bylaws and state law say about Board powers. Which means decisions theoretically would go back and forth endlessly between the Board and membership. Which makes no sense. Second, the membership is attempting to modify the contract that the HOA/COA's governing documents are. Per RONR, a modification to such a contract may be done only via the amendment process given in the governing documents.

For these reasons, I believe this forum's members' frequent insistence on addressing stock corporation queries by reverting to RONR is misguided. Because time and again, the responses here are either flatly wrong (like this latest post by Rob Elsman) in application to a stock corporation, or the responses confuse  the person making the query.  I believe that nearly always, posters who come here with questions about the parliamentary procedure for their stock corporation should be told that discussions of parliamentary procedure for stock corporations is out of this forum's scope, due to the intense regulation of corporations under state law, denoting significant conflicts with RONR. Per RONR itself, said conflicts are resolved in favor of state law and the stock corporation's governing documents.

Where a thread asks about the parliamentary procedure for a stock corporation, the posts and threads that embark on a long discussion of a particular subset of RONR bury the high likelihood that RONR does not even apply when it comes to answering the query do a grave disservice to the person asking the question.

In the alternative, I think every time a person queries here about whether the membership of a stock corporation can countermand a board decision should be told that the RONR-dictated approach is to first amend the Bylaws to give the membership the power the person making the query seeks. This will force stock corporation members posting here to either go to their bylaws and ultimately, as needed, the AoI, Declaration, and state law, or give up. I believe either is preferable to sending the person away from here with incorrect information.

I am also grateful to those posters here that answer queries about a stock corporation with a short response that the query is out of scope here. I believe RONR's own rules on the content of debate for an assembly, such as this forum, support such responses.

 

As you know, many Home Owners Associations, Condominium Regimes, and other corporations have bylaws which adopt RONR as their parliamentary authority.  In many instances, questions are posted to this forum which are answered only by reference to the rules in RONR, and not by anything else in the organization's governing documents or applicable law.  In many instances, the attorneys and management companies advising such corporations are woefully ignorant concerning the rules in RONR governing the procedures which these corporations are required to follow, and they very often give them very bad advice.

Generally speaking, I have found that the persons posting responses to questions here in this forum have been very good at indicating those instances in which rules in governing documents or applicable law may be applicable and, if so, will supersede the rules in RONR. 

 

[Rob Elsman]

Augustin, think of me as a guy with one book on a forum about one book (actually two, if you want to include RONRIB).  Everything else for me is out-of-bounds, as it pertains to the society's governing documents (that I do not have and do not want) or statutes, ordinances, and regulations that vary significantly throughout the nation (that I do not have and do not want).  Organizations that differ from the ordinary society for which RONR (12 ed.) is particularly relevant are on their own to figure out the extent to which the common parliamentary law applies, as this will vary from organization to organization according to their individual natures and attributes.  It goes without saying on every thread that each society is obligated to comply with all the laws, ordinances, and regulations that apply to it, as well as to the society's own bylaws and special rules of order.

Frankly, for purposes of this forum, i do not give a hoot whether a particular organization is an HOA, COA, stock corporation, for-profit, non-profit, or whatever else.  When people come to this forum, they want to know what RONR(12th ed.) says.  Whatever else there is on this forum is more likely to confuse and mislead than to enlighten.

[Gary Novosielski]

On 8/19/2022 at 5:20 PM, Augustin said:

Gary Novosielski, thank you for your opinion. My view is based largely in reading a wealth of HOA and condominium case law for the past 13 years that speak to the board's rights and owners' rights.

I have no doubt that these views would be quite valuable in a forum on legal matters regarding HOAs.  

In a forum concerned specifically about the works of Gen. Robert and his successors, things are necessarily different.  HOAs, while they represent a significant fraction of the questions here are not the only types of organization we deal with. 

And legal matters are specifically not opined upon. While we often point out the existence of sunshine laws, corporate regulations, and sometimes even case law, the advice that comes after it is to consult a lawyer with the appropriate background.

[Termination Requested Pls]

For the archives, I believe the following two RONR sections (12th edition) for stock/business corporations (such as yes, HOAs and COAs) are the most pertinent. I quote these sections below in their entirety, adding emphasis on two sentences:

1:23    "A board may be assigned a particular function on behalf of a national, state, or local government, as a village board which operates like a small city council, a board of education, or a board of examiners. In a non-stock corporation that has no assembly or body of persons constituting a general voting membership, as a university or a foundation, the board of directors, managers, trustees, or governors is the supreme governing body of the institution. Similarly, in a stock corporation, although the board of directors is elected by stockholders who hold an annual meeting, it constitutes the highest authority in the management of the corporation. A board within an organized society is an instrumentality of the society's full assembly, to which it is subordinate. Boards are discussed in greater detail in 49."

49:7  "In any event, no action of the board can alter or conflict with any decision made by the assembly of the society, and any such action of the board is null and void (see 56:41 and 23:9). Except in matters placed by the bylaws exclusively under the control of the board, the society’s assembly can give the board instructions which it must carry out, and can rescind or amend any action of the board if it is not too late (see 35). It should be noted, however, that exactly the opposite condition prevails in connection with boards of business corporations, in which the board has exclusive power and authority to operate the business."

[Emphasis added by Augustin. Credit to Dan Honemann for first pointing out 1:23 earlier in this thread.]

This is a Robert's Rules forum. It seems to me that the two sentences bolded and underlined above, from RONR 12th edition, respond to the OP's question. In short: The decision on the masks in the common areas was always the Board's to make. 

I do not know how anyone could read the statements above and be certain that the membership can override a decision of the board of a stock/business corporation. If there is the least bit of doubt on the point, then it seems to me that an RONR parliamentarian (and I do not use the term "parliamentarian" lightly) would want to seek the safe course for said stock/business corporation. Said safe course appears to me to be to recommend that the membership first pursue an amendment to the bylaws, allowing the membership to override such-and-such decision by the board by such and such a percentage vote. Once this amendment is achieved, the membership can have the vote it desires to override the board decision.

I am posting for the archives, in anticipation of future queries from those involved with stock/business corporations. I think such queries deserve a substantive RONR-based answer where there is one, at least in my opinion.

Those of you who rejoined this thread, that I revived after four months, and allowed me to continue the discussion: I thank you for your patience.