The ABCs of HOA committees, including executive vs. advisory committees and meeting and minute requirements.
Whether your community is large or small, the responsibilities of the board of directors are tremendous. From collections to maintenance, homeowner complaints, and architectural review, even boards of associations with professional management can find themselves overwhelmed. The formation of committees can be an effective way to lighten the board’s load, and engage the membership – so long as the board understands the legal limits on what committees can and can’t do, and how they operate.
Formation of Committees
In general, the board is responsible for appointing committee members, who serve at the pleasure of the board – meaning the board has the discretion to appoint or remove committee members. Sometimes the scope of a committee’s authority is outlined in the governing documents, such as with an architectural committee. However, in most cases, it will be necessary for the board to define the purpose of the committee, the scope of the committee’s authority, and the number of members, through a resolution, motion or committee charter.
Executive Committees and Advisory Committees
There are two main categories of committees, generally referred to as “Executive Committees” (sometimes referred to as “Committees of the Board”) and “Advisory Committees.”
Executive Committees are comprised solely of directors and can make decisions on behalf of the board, subject to certain limited exceptions (Corp.Code §7212(a)). Executive Committees can be particularly useful in situations that require confidentiality and/or decision-making between regular board meetings, such as monthly financial reviews; approval of large expenditures; and litigation updates with association counsel.
Advisory Committees include non-director members and do not have the authority of the board (Corp. Code §7212(b)). Therefore, we generally recommend that committees which include non-directors act in an advisory capacity only. These Advisory Committees can do research and investigation, and make recommendations, but should leave the ultimate decision-making to the Board. This makes sense for a variety of reasons, including that non-directors might not be covered by the directors and officers insurance policy, are not fiduciaries, and were not elected by the membership. Advisory Committees can be useful in situations that are labor-intensive (e.g., newsletter committees) or uncontroversial (e.g., social committees). However, if the CC&Rs require the formation of a committee that requires non-directors to make decisions (e.g., an architectural committee), then the Board must allow the committee to make such decisions.
Meetings & Minutes
If a majority of the board serves on the committee and is present at the committee meeting, then the committee meeting is a board meeting (Civil Code §4090) and must be treated as such, including for example, notice of the meeting, agenda, homeowners’ forum, and minutes. However, if a majority of the board does not serve on the committee, then the committee meetings can be very flexible and do not require these formalities, with one notable exception: any committee with decision-making power is required to take meeting minutes (Civil Code §5210(a)(2)).
The Buck Stops Here
Lastly, and perhaps most importantly, regardless of the type of committee, the Board is ultimately responsible for all committee decisions and actions (Corp. Code §7210). Boards cannot avoid responsibility by delegating tasks to committees, but they can use committees to reduce their workload and stress. Let us know if your association has questions about managing committees effectively.