As attorneys and professional parliamentarians, Carole Albright and I advise many associations across the country, including some of the largest and most complex. Our work frequently involves helping with governance documents, meetings, and disciplinary matters.
In the past decade, we’ve seen a noticeable increase in questions related to board “codes of conduct” (or “codes of ethics”) which tend to fall into two categories:
- Drafting or recommending such codes.
- Assisting with the disciplinary process when a board member is alleged to have violated one.
Without turning this into a Parliamentary Law 301 course, we have some general observations. But because no single article can address every type of association, under all state laws, whether incorporated or not, across all industries, these are general considerations and not legal advice.
The Intent of Codes of Conduct
We have no objection to well-crafted board codes of conduct. A thoughtfully written code of conduct can help set expectations and provides a common basis of appropriate behavior for board members. This is especially helpful for new directors or for individuals who have never served on a board before. In many cases, a code of conduct may be the best or only guidance a director receives on decorum and proper/improper conduct.
Several organizations offer examples of model codes that can serve as a starting point. For example, the Community Associations Institute (CAI) provides this Model Code of Ethics for Community Association Board Members intended for homeowner and condominium associations. The code highlights “should” and “should not” behavior for acting in the best interest of the association, avoiding conflicts of interest, maintaining confidentiality, and respecting differing points of view. The American Society of Association Executives (ASAE) has published various articles on effective codes of conduct. For instance, Best Practices to Maintain an Enforceable Code of Conduct emphasizes the importance of a clear code, defined procedures for handling complaints, and consistency in enforcement. Such policies are most effective when they are built on shared values and when violations are handled through a fair and transparent process.
Where Problems Arise: From Aspirational to Punitive
While we are fine with codes of conduct, problems arise when boards attempt to transform these policy documents from aspirational into automatic triggers for disciplinary action. For instance, we’ve encountered board-adopted codes of conduct that state a violation results in immediate removal as a director. Other associations have had directors sign a conduct policy that states a violation is a resignation from the board.
This is where legal and procedural advice becomes paramount. Such provisions often exceed the authority granted to boards in the governing documents and override the rights of the membership. Most directors are elected by the members of the association. If other board members can remove each other without member involvement, it alters the balance of power and can lead to abuse.
Consider the following scenarios, both of which we have seen:
- A director who frequently raises uncomfortable questions or challenges the consensus is branded as “disruptive.” The majority uses the code of conduct as a mechanism to remove that director without a vote of the members.
- A political dispute arises among directors. One faction accuses a dissenting member of violating the code of conduct. That member is barred from voting or even removed entirely by a majority vote of the board.
These actions would be problematic in most jurisdictions for associations with members. For example, North Carolina law includes protections against unilateral board removal. For homeowners and condominium associations, the Planned Community Act and Condominium Act both contain mandatory language (that applies to most associations) stating that director removal is done through a process involving proper notice and a membership meeting and vote. Similarly, the North Carolina Nonprofit Corporation Act, based on the national Model Nonprofit Corporation Act, provides that directors elected by the members (not the board) are removed by the members.
In short, attempts by board members to remove one of their own using only a code of conduct may circumvent the legal framework intended to protect the rights of the membership. Check with your attorney, but generally a board cannot lawfully expand its own power through board policy alone by adopting a code that contradicts statutes or the governing documents.
Can Codes of Conduct Have Consequences?
Yes, but proper authority is required. In other words, for codes of conduct to have consequences, there may need to be a clear “hook” in the association’s governing documents. For example, if the bylaws explicitly state that violations of the code of conduct will result in a certain action, such as suspension or a disciplinary proceeding, then those consequences may be enforceable. But absent such authority in the bylaws or articles of incorporation, a code of conduct is more accurately described as a set of ethical expectations rather than a binding enforcement tool.
Even in the absence of specific enforcement provisions in the governing documents, violations of codes of conduct can still have consequences. For instance, the membership might consider such violations when deciding whether to initiate a formal removal process. Or, a board might still censure a director or exclude them from certain appointments or committee assignments, provided those actions are authorized and consistent with law. But automatic removal or mandatory resignation clauses, unless authorized by the governing documents and consistent with statute, may well be unenforceable.
Even in instances where governing documents might permit a board to remove one of its own members based on a code of conduct, boards should still exercise caution. The legal authority to act does not always make it the right decision. When a board uses internal policies to remove a fellow director who was elected by the membership, it risks the appearance of silencing opposition or being heavy-handed.
Boards should ask themselves not only can we do this, but should we? Whenever possible, decisions with long-term implications for board composition and governance should remain with the membership that made the original selection. Board members removing a colleague, whatever the circumstances, could erode trust and damage the association’s credibility, which might be more damaging than any alleged director misconduct.
Conclusion
Codes of conduct serve a valuable purpose when used to establish expectations for behavior and promote ethical governance. But they should be approached carefully. When codes are used as a backdoor means of removing elected board members, they risk undermining the governance role and fiduciary duties that directors are supposed to uphold.
Associations that wish to include enforceable consequences in board codes of conduct should carefully review their governing documents and obtain professional guidance. Any disciplinary mechanism must be supported by proper authority, clearly defined, and fair in both process and application. Otherwise, even the best intentions may lead to legal challenges, internal conflict, and diminished credibility for the organization.
Jim Slaughter is an attorney, Certified Professional Parliamentarian, Professional Registered Parliamentarian, and past President of the American College of Parliamentary Lawyers. He is author of four books on meeting procedure, including two updated for the latest Robert’s Rules: Robert’s Rules of Order Fast Track and Notes and Comments on Robert’s Rules, Fifth Edition. Both books have been selected as “Editor’s Picks” by Publisher’s Weekly. Many free charts and articles on Robert’s and meeting procedure can be found at www.jimslaughter.com.