GUIDE TO BOARD OF DIRECTORS MEETINGS

Current law requires associations to permit members to speak at both membership meetings and board of directors meetings (other than executive sessions). It is therefore important to review the method and procedures associations should follow in conducting their board meetings.

DEFINITION OF BOARD OF DIRECTORS MEETING

A board of directors meeting is defined to include:

Any congregation of a majority of the members of the board at the same time and place to hear, discuss, or deliberate upon any item of business scheduled to be heard by the board, except those matters that may be discussed in executive session.

NOTICE OF BOTH REGULAR AND SPECIAL BOARD MEETINGS

Required Length of Time.

Unless the time and place of board meetings are fixed by the bylaws, or unless the bylaws provide for a longer period of time for notice, members shall be given notice of the time and place of board meetings wherein there will be "any congregation of a majority of the members of the board of directors" at least four days prior to the meeting. Additionally, if the bylaws of an association provide for a period of notice which is longer than four days, then that longer period of notice would control and notice of the board meeting would have to be given for that specified period of time.

Posting of Notice to Members.

Notice to the members can be given by "posting the Notice in a prominent place or places within the common area, by mail or delivery of the notice to each unit in the development, or by newsletter or similar means of communication." Generally, associations can comply with the foregoing requirement by:

(a) Posting the notice of the board meeting on a bulletin board within the common area; or

(b) Posting the notice in a prominent place at the entry gate to the subdivision. (Some associations have entry gates or barriers which can accommodate posted announcements.); or

(c) Including the notice in the monthly newsletter; or

(d) Enclosing the notice with homeowner monthly billing statements for assessments.

Members Who Request Notice of Board Meeting.

Notices are now required to be given by mail to all owners who have requested notification of board meetings by mail, at the address requested by the owner. Associations can comply with this requirement by either: (a) mailing a separate notice to the requesting owner; (b) including the notice in the monthly newsletter (provided the newsletter is mailed); or (c) by including the notice with the homeowner's monthly billing statement for assessments (again, assuming the monthly billing statements are mailed).

Notice to Board Members.

An association must also provide appropriate notice to its board members in accordance with its bylaws. The notice to members is not intended to be given in lieu of notice to the board members, but rather in addition thereto. Thus, unless all board members waive notice, notice of regular and special board meetings must be given to board members in accordance with the association's bylaws.

Exceptions to Giving Notice to Members.

An exception to the noticing requirements may be utilized wherein an emergency meeting is called by the President or by two members of the board of directors, if there are circumstances: (a) that could not have been reasonably foreseen; (b) which require the immediate attention and possible action of the board; and (c) which of necessity make it impractical to provide the requisite four-day notice. For example, if the subdivision experienced an earthquake which required immediate remedial repairs, necessitating a large expenditure of monies, the association could hold an emergency meeting. However, it is recommended that if there is any time available to provide notice (albeit less than four days), said notice should be given.

CONDUCTING THE BOARD MEETING

Board meetings should be conducted following a designated agenda, or order of business. (See in our Samples section a Membership Guide to Board of Directors Meetings, which we suggest property managers and board members review and adapt to their specific needs.) The Guide offers helpful suggestions on conducting a board meeting and a suggested Order of Business. Boards of directors must provide a specific time period, sometimes called "Open Forum," to permit any member of the association to speak at either regular or special board meetings (except for executive sessions). The board may establish reasonable time limits within which members may speak. We suggest that two to three minutes is reasonable and sufficient. The board may also wish to establish a policy which states that speeches should be free from slander and belligerence, in order to establish a cordial and constructive environment during open discussions.

EXECUTIVE SESSIONS

By definition, executive sessions do not constitute "board of directors meetings." Members are therefore not entitled to prior notice of any such executive sessions. However, existing law only permits executive sessions to consider litigation (pending or threatened), matters relating to the formation of contracts with third parties (i.e., vendors), personnel matters, member discipline, or to meet with a member regarding the member's payment of assessments. Additionally, matters discussed in executive session shall be generally noted in the minutes of the next board of directors meeting open to the membership. [For example - "The board then adjourned to executive session to discuss the lawsuit filed by John Doe in which the Association is named as a defendant."] Although not specified, it appears that a board could have an executive session separate and apart from a regular or special board meeting, as long as the matters discussed fall within the categories above. If an executive session did occur separately from a board meeting (as opposed to adjourning to an executive session from a regular board meeting), the matters discussed in that session should be generally noted in the minutes of the next board of directors meeting open to the membership.

Minutes.

Many associations are still confused as to the proper content of executive sessions and how these sessions should be handled. If an association maintains minutes for executive sessions in addition to minutes for the regular board meetings, it is crucial that the minutes be kept separately. Executive session minutes should be kept in a separate minute book. Additionally, only members of the board of directors, employees and other designated representatives of the association may review executive session minutes. Executive session minutes should note only the date and nature of any discussion and the related action taken by the board. These minutes should not be considered part of the association's "books and records" which would normally be available to the membership under Corporations Code §8333 and Civil Code §1363(f).

"SCHEDULED TO BE HEARD" EXCEPTION

It is interesting that the Civil Code language used in the definition of a meeting specifically references the hearing, discussions, or deliberations of any business scheduled to be heard by the board. Thus, it might be permissible for board members to have an informal workshop without a specific agenda and thereafter discuss any matters, as long as said matters are not items of business scheduled to be heard by the board at any upcoming board meeting.

However, this loophole should not be used regularly, but only in rare instances, since we believe the intent of the applicable statute is to preclude the use of study sessions, workshops, or informal meetings to discuss association business prior to the actual board meeting. Thus, whenever possible, notice of any kind of workshop or meeting (such as posting in the common area or by newsletter) should be given. More importantly, these informal study sessions or workshops must be open to any member who desires to attend.

PRACTICAL APPLICATION

Holding Agenda Meetings.

For those associations which normally conduct study sessions, workshops, or informal meetings, we recommend that boards of directors consider holding "agenda" meetings prior to the regular board meetings. The purpose of an agenda meeting would be to determine what items should be scheduled for the next board meeting. Notice of the agenda meeting would have to be given to the members, but the notice could indicate that: (1) the only purpose of the meeting is organizational to decide on agenda items for the next board meeting; and (2) no decisions would be made at the agenda meeting. Notice of the agenda meeting could be given far in advance (for the entire year, for example) to avoid continual notices throughout the year. Although the agenda meetings would still be open to the members, notice would still be required and members should still be given a limited opportunity to speak. Boards could thus continue to have discussions and deliberations without concern for having to hold them before a large member audience.

Denny Meetings.

It has been suggested that boards could still hold their informal meetings, workshops or study sessions at a local restaurant (the so-called Denny meetings). Unless the association's governing documents require that board meetings be held within the subdivision, scheduling a board meeting at a local restaurant may be permitted, as long as notice of the meeting is provided as required by the Civil Code.

Although we do not recommend regular use of Denny meetings, there are apparently no statutory provisions precluding such meetings if properly noticed, as long as there are no bylaw provisions requiring the holding of such meetings at a particular location.

Implementing Membership Attendance at Teleconferenced Meetings.

Unless a board meeting is being held in executive session, a meeting by telephone conference wherein all board members may hear each other would be a valid meeting. However, existing law also requires that members be able to attend such meetings and be provided an opportunity to speak. Thus, if boards intend to hold meetings through means of telecommunication, speaker equipment at a designated location will be required to permit homeowners the ability to attend such a meeting.

Participation in Board Meetings with Electronic Communications.

Under California Corporations Code, boards may now participate in meetings via electronic video screen communications, or any other communication equipment, unless otherwise precluded within the association's Articles of Incorporation or in the Bylaws, as long as the following conditions are met:

(a) All participants can communicate with each other concurrently.

(b) Each participant is provided the means to participate in all matters before the board, including the capacity to propose, or interpose an objection, to a specific action taken by the board.

(c) The board uses some means of verifying that the person communicating by telephone, electronic video screen or other communications device is a director entitled to participate in the board meeting, and all statements, questions, actions, or votes were made by that director and not by another person not permitted to participate as a director.

In the future, technological advances will permit boards to comply with all of the conditions set forth in the Corporations Code and conduct meetings through the use of electronic communications. Technical compliance of board meetings through electronic communications will necessitate some sort of computer portal through which homeowners may hear all communications. Furthermore, owners must be given an opportunity to electronically communicate during the Open Forum session. In the Internet Age, board meetings conducted entirely by electronic systems are not only possible, but will likely be a reality within the next five years.

See sample resolutions and executive session policy in our Samples section.

The information provided in this web page is offered for informational purposes only; it is not offered as and does not constitute legal advice. [Attorney/law firm] does not seek to represent you based upon your visit or review of this web page site.