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Shareholder privacyJul 07, 2008


We have a Board member who has, in emails to other Board members, accused a shareholder of disorderly conduct and intoxication in the past. She cited instances of this behavior, I believe, to justify her questioning guests of the particular shareholder. Is it ever appropriate for a Board member to email sensitive information about a shareholder? (I also do not know how accurate her accusations are.) Are we risking legal liability by allowing her to do this? Another issue is whether Board members should question visitors when we have security guards. Thanks for any guidance.

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Shareholder privacy - AdC Jul 07, 2008


(1) Appropriateness of e-mail communications for sensitive information.
Unfortunately, a code of conduct and ethics is not a document that is easily found in co-op boards as a guiding document. In fact, I doubt if there is a board with access to one. Consequently, board members are left to their corporate experience and their moral values founded on their faith or ethics formation to guide their behaviors and to curb their tongues.

Since co-ops are essentially corporations similar to any publicly traded corporation, board members should conduct their business with the highest standards of integrity and business practice possible. E-mails are not private when writing on co-op matters to other board members, but they now belong to the corporation. In the event of a litigation, records and board communications among themselves and with the property manager and co-op counsel may be subpoenaed. Although the person being spoken of now may not be the subject of the litigation, all the e-mails are equally printed and reviewed. Derogatory language and expressions may be damaging to the co-op. Therefore, communications involving board members, property managers, co-op counsel or any other professional must be restricted to a formal business tone. Sensitive questions should be out of the e-mail communications unless a formal letter is being transmited.

Your co-op counsel may be a person to address or dictate how communications via e-mail should be conducted, what should be excluded, what to print and retain on file or burned onto a CD and what retention to assign and what to delete as soon as possible.

(2) Allegations: Obviously, if the comments seem improper, by all means speak up and bring the offending person to his/her senses. However, I would suggest doing your homework by first approaching individually other board members to find out where they stand with regard to these allegations and the manner in which the person expresses the allegations. Are the other board members equally uncomfortable as you are or are they somewhat uneasy? do they feel it's okay to speak freely without restrictions or do they feel it is necessary to stop this activity? Depending on the reception you get, you may have to do some persuasive work in order to bring them to see the issues. It would be tragic that in the process of bringing a higher standard other board members will end up taking aim at you for being too strict or hearing them they say, it's okay to express however you wish. Obviously, you want support from the rest of the board.

(3) Questioning Visitors: Who is anyone to question visitors of residents unless the visitors' public actions cause concern? While we may question eccentric fashions, extreme body piercing, extreme looks, etc, we cannot jump into conclusion as to the moral value of any individual. If a visitor behaves or uses objectionable language in public areas of the builidng in a reprehensible manner, then call the security guards, the police or write a letter to the shareholder if the gravity of the problem does not merit removal of the visitors from the building. If a shareholder does not like the action against their visitors while in the public areas, the house rules and proprietary lease probably say that shareholders are responsible for the actions of their guests. Do what you need to do, provide documentation to the co-op counsel and BE DONE!

Good luck!

AdC




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Shareholder privacy - BP Jul 08, 2008


Margaret - I agree with AdC's comments about this. My two cents --

If your Sh doesn't do anything offensive in public areas, doesn't create undue noise or disruption in her apt, and no one complained to mgmt or the board about her, you have no reason to fault her conduct. If she drinks in her apt - even if she was in the lobby or elevator and smelled of alcohol -that's not a coop issue, as long as she doesn't disturb anyone, create a scene or damage anything.

If she is disruptive, mgmt should send her a letter saying her conduct is objectionable per coop rules and advising her to be guided accordingly in the future.

You said your BM questions her guests. Is it because they are disruptive or is your BM just asking them what the Sh does (or what they do) when they visit her? If the guests are a problem, that warrants a letter to the Sh too. But your BM has no business asking them what goes on in the privacy of the Sh's apt if they aren't causing any disturbance. If your BM makes accusations to the board about misconduct, she should present proof at a board meeting, not make unsupported claims to the board via email.

I would think that if this Sh's conduct is so disruptive, you, other board members or mgmt would get complaints from residents or you would be aware of it yourselves.

If your BM's accusations have no basis in fact and there is no proof of misconduct, your board president or coop attorney should tell your BM it's not a coop issue and to mind her own business. Maybe your BM is just a busybody who likes digging up dirt and in doing is wasting your board's valuable time. It's possible, just a guess on my part without knowing all the facts.

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