Directors v. Officers
By: David Silver
One of the benefits of being general counsel for many community associations-both HOAs and condos-is that we can recognize frequently misunderstood, confusing and difficult issues, and help our clients avoid them. One misunderstanding that arises quite frequently is the failure to properly distinguish between directors and officers. With election season approaching for many of you, we thought a short discussion about a few director v. officer distinctions might be helpful.*
Manner Elected – Board Members. Directors are almost always elected by the members/owners at a meeting of the association. That is, when associations hold elections, owners will be voting to fill director positions, not officer positions. As such, owners should not be asked to vote for a “president” or “treasurer,” but rather for the available director position and its corresponding term of one year, two years, or whatever is required by your governing documents.
Manner Elected – Officers. Once directors are elected by the membership, normally the board, with its new members, is required to meet (sometimes right after the election, but normally within a few weeks) to elect officers. Your governing documents (probably the bylaws, but maybe the declaration) should tell you when a new board must meet to decide who will fill the officer positions. Again, owners traditionally elect directors, and then the directors, at a board meeting, vote among themselves to elect a president, vice-president, treasurer and secretary. If permitted by your documents, in Washington or Oregon one person can hold more than one officer position, however, in Washington the offices of president and secretary cannot be held simultaneously. RCW 24.03.125; ORS 65.371.
Qualifications. It would be unfortunate to nominate and vote on a candidate who would not be qualified to serve if elected. Your governing documents should state whether a director must be an owner or member, or possess some other qualifications. You are certainly not alone if you are wondering who would want to serve on a board other than owners. Yet, there are many non-owners who serve on boards–long-term renters, live-in family members, and spouses (who are not technically owners) can make a great additions to a board. However, if only owners may serve as directors, it would preclude these potential candidates. This is an important distinction, and before your election you should check what qualifications a director must have. Likewise, for officer positions, your governing documents should tell you whether or not an officer must be a director.
Removal. Commonly, the power to remove a director or officer is vested in the same group of people that have the power to elect the directors or officers. That is, the power to remove a director is typically vested in the membership, and the power to remove an officer is often vested in the board. This is often confused, like when a group of owners petitions the board to call an association meeting to “remove the president.” In reality, owners can vote to remove a director, but not to remove a director from their officer position as president (even though, the reality is that removal of a director probably also effectively ends that director’s officer tenure).
The distinctions between directors and officers are important. Contact your attorney if you have questions.
* Each association’s governing documents are different, and can deviate from the “typical” provisions described above. As always, it is critical that each association refer to its own governing documents for specific requirements.