Authority, Structure & Responsibility
The foundation for any non-profit corporation committee is typically found in the Non-Profit or Business Corporation Act of your respective state. Another source of authority is usually found in the association’s bylaws. An example of such language might be as follows:
“The Board of Directors may, by resolution, designate one or more Committees. Any such Committee, to the extent provided in the resolution, shall have and may exercise such authority as the Board may delegate, regarding the affairs of the Association.”
The board is best able to delegate its authority to a committee by creating a “charter.” This process involves the development of a document setting forth the assignment of specific tasks (violation enforcement, budget & finance, communication, etc.) which is endorsed by the board. The charter empowers the committee to perform these specific tasks, while also closely defining the scope of those tasks. By formalizing a committee’s authority in this manner, you avoid the “rogue committee” scenario. More about this later.
There are two methods that boards may employ to appoint committees. They can either appoint a chairperson who then “recruits” the committee members, or appoint the entire committee and allow them to select their own chairperson. Unless the governing documents prescribe how this is done, the board has discretion as to which method they may choose. Regardless of how the committee is constituted, it is quite common for a board member to serve on the committee, typically as a liaison between the board and the committee. Committee appointments must always be made by a majority vote of the board in an open meeting and reflected in the minutes of that meeting. That will also create the terms of committee members.
Generally speaking, committees are charged with evaluating issues, developing policies or soliciting member input, and then submitting recommendations to the board. The board may then vote in open session to accept or reject those recommendations. “Standing committees” typically have broad authority to enforce or implement specific guidelines for an ongoing purpose. The best example of this would be an architectural review committee (ARC). This type of committee is usually described in the governing documents and is vital to the governance of any well-run community association. It is not unusual for an architectural committee to have final decision-making authority over requests for approval to change the exterior appearance of a home or unit or the installation of an exterior structure.
Rogue committees can be quite injurious to the operation of any community association. They essentially “sprout up” as a fervent group of like-minded owners who decide to take matters into their own hands. They may show up at a board meeting or annual meeting, demanding that action be taken on a certain matter, and then “volunteer” to take care of it.
Unfortunately for uninitiated boards, while this may seem like an attractive way for already overworked volunteers to offload a problem, these groups will usurp the board’s authority and proceed with a “carte-blanche” approach to accomplish their particular objectives without regard for the best interests of the association. Boards must understand that if they allow this to happen, they are responsible for the actions of the rogue committee. Without the proper guidance and oversight, this arrangement can, and usually does spin out of control. The following is a brief list of things that no committee should be permitted to do without prior approval from the board.
The foundation for any non-profit corporation committee is typically found in the Non-Profit or Business Corporation Act of your respective state. Another source of authority is usually found in the association’s bylaws. An example of such language might be as follows:
“The Board of Directors may, by resolution, designate one or more Committees. Any such Committee, to the extent provided in the resolution, shall have and may exercise such authority as the Board may delegate, regarding the affairs of the Association.”
The board is best able to delegate its authority to a committee by creating a “charter.” This process involves the development of a document setting forth the assignment of specific tasks (violation enforcement, budget & finance, communication, etc.) which is endorsed by the board. The charter empowers the committee to perform these specific tasks, while also closely defining the scope of those tasks. By formalizing a committee’s authority in this manner, you avoid the “rogue committee” scenario. More about this later.
There are two methods that boards may employ to appoint committees. They can either appoint a chairperson who then “recruits” the committee members, or appoint the entire committee and allow them to select their own chairperson. Unless the governing documents prescribe how this is done, the board has discretion as to which method they may choose. Regardless of how the committee is constituted, it is quite common for a board member to serve on the committee, typically as a liaison between the board and the committee. Committee appointments must always be made by a majority vote of the board in an open meeting and reflected in the minutes of that meeting. That will also create the terms of committee members.
Generally speaking, committees are charged with evaluating issues, developing policies or soliciting member input, and then submitting recommendations to the board. The board may then vote in open session to accept or reject those recommendations. “Standing committees” typically have broad authority to enforce or implement specific guidelines for an ongoing purpose. The best example of this would be an architectural review committee (ARC). This type of committee is usually described in the governing documents and is vital to the governance of any well-run community association. It is not unusual for an architectural committee to have final decision-making authority over requests for approval to change the exterior appearance of a home or unit or the installation of an exterior structure.
Rogue committees can be quite injurious to the operation of any community association. They essentially “sprout up” as a fervent group of like-minded owners who decide to take matters into their own hands. They may show up at a board meeting or annual meeting, demanding that action be taken on a certain matter, and then “volunteer” to take care of it.
Unfortunately for uninitiated boards, while this may seem like an attractive way for already overworked volunteers to offload a problem, these groups will usurp the board’s authority and proceed with a “carte-blanche” approach to accomplish their particular objectives without regard for the best interests of the association. Boards must understand that if they allow this to happen, they are responsible for the actions of the rogue committee. Without the proper guidance and oversight, this arrangement can, and usually does spin out of control. The following is a brief list of things that no committee should be permitted to do without prior approval from the board.
- authorize payments to vendors
- send out communications to the membership
- approve, recommend or implement policies directly to association members
- fill vacancies or appoint members to the board of directors
- adopt, amend or repeal any of the governing documents
- fix compensation for directors or committee members
The committee should convene at least one meeting to develop and prioritize their goals and objectives. If the board gives the committee specific “marching orders,” those should take priority. Legitimate committees are a powerful way to get additional members involved in association affairs. They also represent a fertile field to grow future board members.
THE COMMITTEE’S ROLE
- Act in accordance with the committee charter
- Draft requests-for-proposals (RFP’S) / Analyze new or existing contracts
- Develop policies for consideration by the board
- Perform duties within the context of the governing documents
- Evaluate performance of vendors / Recommend strategies and options
- Solicit input from the members
- Provide regular reports to the board regarding activity or progress
- Act as incubator for new leaders
THE BOARD’S ROLE
- Give the committee clear expectations and timetables
- Keep the lines of communication open
- Challenge the committee to explore all options
- Encourage a “can-do” attitude and discourage negative thinking
- Work to avoid subjective opinions and emotional turmoil
- Place a premium on cooperation and productive problem-solving
- Request status updates and formal reports on a regular basis
- Review committee recommendations with an open mind
- Act on those recommendations in a timely manner
Committees represent a wonderful tool for every well-run association to utilize. Make sure you build a firm foundation for their success!
This article is provided by Lewis Management Resources Inc.