Quick and Easy Guide to Decoding Your Governing Documents
Following Your Unwritten Fiduciary Duty
While the governing documents define the roles and responsibilities of board
members, it's important to realize that a board member's fiduciary duty might
not necessarily be mentioned even though every board member has one
as a condition of serving on the board. Knowing of your fiduciary duty and
incorporating it into your association's philosophy ensures that you and the rest
of your board go beyond the letter of your governing documents and follow them
in their intended spirit.
"An association is a non-profit corporation. The board members must comply with
the provisions of the governing documents, but in addition, they must meet the
standards required of a board member under the corporation statutes. A board
member shall discharge the duties of the position in:
1. good faith;
2. in a manner the board member reasonably believes to be in the
best interests of the corporation; and
3. with the care an ordinarily prudent person in a like position
would exercise under similar circumstance.
'Good faith' means with full disclosure and full honesty; it means without any
hidden agendas. 'Best interests of the corporation' means acting in the best
interest of the overall community and not just some of the members. The 'care'
statement means putting as much thought and consideration into a decision as
would be expected of someone in such a situation, or not acting carelessly. In
addition, every board member has a duty to honor the board's decisions (even
if you personally disagree with them) and to avoid conflicts of interest. Your
manager should be familiar with these standards and strive to make sure every
board member adheres to these principles."
— Traci Lehman, CMCA®, AMS®, PCAM®
President, Cities Management
