Josh Milgrom in Board Operations on June 21, 2013
There are two main breeds of rogue, each with unique characteristics and goals:
The self-interested rogue seeks election to the board primarily to further his or her own interests or the interests of friends. This type of rogue often thinks the "director" title comes with perks and a sense of entitlement, including the ability to disregard the co-op or condo governing documents. We have seen board members who repeatedly park in visitor parking spaces, who have pets in contravention of the declaration, house rules or bylaws, and who make decisions based solely on how those decisions will personally impact them as a shareholder or unit-owner.
A board member with his or her own self-centered agenda is typically in direct contravention of corporation law that says board members must act honestly and in good faith in managing the property and assets on behalf of all of the owners.
The more common breed, the well-intentioned rogue, joins the board for all the right reasons and has a legitimate desire to improve things. Unfortunately, the well-intentioned rogue poses particularly interesting problems, especially when combined with a domineering personality.
A rogue board member may have little appreciation or concern for democratic process. The will of the majority of the board becomes merely an obstacle to overcome.
Secondly, rogues may divulge confidential information to others. In many cases, this is to gain support for the rogue's position on a particular issue. Confidentiality is an important aspect of board membership. Disclosing confidential information is contrary to established board practices, may threaten various aspects of the corporation's business, and may cause the corporation to be in breach of privacy legislation.
And thirdly, rogues may be disruptive or disrespectful in co-op and condo board meetings. The rogue may monopolize meetings by obsessing over specific issues. He or she may engage in name-calling, act inappropriately or even physically abuse and threaten others. Sometimes, the rogue may bully other board members in the hopes of achieving a majority on a particular issue. This type of activity hampers the board's ability to deal with the business issues on the agenda.
What To Do?
A rogue can singlehandedly put co-ops and condos in a precarious position. Unfortunately, the law does not contain much protection against rogues. As a proactive measure, directors should become educated: attend seminars, read articles and attend conferences. Board members who understand their duties and responsibilities are less likely to go rogue.
If the education boat has sailed, the remaining directors should consider the following tactics:
Being a director is not about being right all of the time; it is about working with the other directors to accomplish actions that are in the best interest of the co-op or condo. Opinions differ and conflict will undoubtedly arise. On the bright side, always remember that majority rules; agree to disagree with the rogue and move on.
Josh Milgrom is an attorney at Heenan Blaikie, working with the Condominium Practice Group. The president of his 349-unit condominium, he received his JD at the University of Toronto. This is adapted from his post at the firm's blog, Condo Reporter.
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