In community associations, each board member is considered a fiduciary and is duty bound to act in the best interests of all residents, not his or her own best interests.
In general terms, fiduciary duty is the highest standard of care imposed under law, and it occurs when one or more persons are responsible for the money or property of another. The fiduciary is expected to be honest, free from fraud and faithful to his or her obligations.
Accusations of self-dealing or conflicts of interest sometimes arise during the vendor hiring process. Generally, board members who profit financially from hiring a vendor risk putting their own interests before those of the community.
What is your association doing to ensure the community comes first?
- We ask board members to fully disclose a conflict when objectivity cannot be maintained.
- We ensure the board minutes reflect the entire disclosure.
- We require conflicted board members to sit out the board’s decision on the conflicting matter, as well as related executive sessions that may occur.
- We will seek multiple, sealed bids and carefully review them before making a decision.
If you have any questions about fiduciary duty, conflicts of interest or expectations for board members, please ask.