Monday, April 23, 2012

The Role of the Secretary

Our first meeting in 2012 was heavily attended with more than 40 people interested to learn more about The Role of the Secretary. We're grateful to Scot Swanson, Bellingham association attorney for his useful and thoughtful comments.

In associations -- which are usually some type of corporation (or may be unincorporated) -- a secretary is a board position with separate responsibilities, different from other board members' responsibilities, but just what are they?

The Washington State law for associations isn't clear, nor are many governing documents clear about what these duties and responsibilities are. As a result, we can look to the state corporate laws to define the secretary's role.

Essentially the role of board secretaries covers paperwork, based on recording and keeping minutes, corresponding the board's communications among board members and to the membership, and finally filing, storing and retrieving the association's documents and records. Often association managers support secretaries in many of these duties, and each association must determine the efficacy of delegating these tasks or performing them in-house.

(A regular review of this checklist can help spot duplicate efforts and holes in these processes.)

Since this may be the most visible role, it's up to each secretary to fully understand what's required to be documented in meeting minutes, and who can read them, and when. Board meeting minutes document the actions of the board taken in their position of power, based on being elected by people (owners) who trust the board members. (This is a different scenario from publishing a newsletter about the goings and comings within the community.)

Board meeting minutes begin with an agenda. The secretary works with the president to formalize the agenda, which the secretary publishes to the board and to the membership within the proscribed time period, based on the type of board meeting being called. Your governing documents are specific about the length of time and type of notice required for each kind of board meeting.

Finalizing the drafts, sending them for review and suggested edits by board members, and publishing them in draft or unapproved form all take place soon after the board meeting. When board meeting minutes are finally approved -- usually at the next board meeting -- they are published as 'approved' or final minutes and become the permanent, legal record of the actions taken by the board on behalf of the corporation and its members.

You can read more in this booklet, published by Communications Association Institute, The Board Secretary: Roles and Responsibilities in Community Associations.

A few caveats about board meeting minutes:
  • Less is more: beware of too much detail
  • Recording meetings is not a good idea, since these recordings can be subpoenaed, and transcription can be expensive
  • Minutes document board actions: they are not written to educate members (newsletters can educate)
  • Minutes are used by courts, because they are legal documents -- a history of the association's business
  • When directors descent, it's a good idea to note vocal disagreements.
A few tips for board meeting minutes:

  • Include minimal financial details in minutes
  • Document all withdrawals from reserves and include the repayment plan
  • Require that committees prepare written reports for the board packets, and attach the reports to the minutes when archived -- don't publish committee reports to members.

Board members operate with the trust of owners. Board members hold the power to act on behalf of owners. Honouring this trust is key for any director or officer in board work.

There are several phrases that define ways in which board members can regard this fiduciary duty, and they are written within Washington State Law.
  • The Condominium Act (RCW 64.34.308) defines 'ordinary and reasonable care' as a guideline for officers.
  • The Non-profit Corporation Act (RCW 24.03.127) defines that officer's work be for the 'benefit of the corporation'.
  • The Miscellaneous Corporation Act (RCW 24.06) uses the 'business judgement rule' as a guideline for officer's efforts.

It is imperative that all officers wear the 'hat of the association' when doing board work, and remove their 'personal interest hat' so as to benefit all the owners who have invested their trust in board members.

Include this coverage in your master policy -- it provides automatic indemnity for board members.

See other posts on this blog for A Guide to Taking Perfectly Proper Minutes and a Template for Board of Directors Meeting Minutes.

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