Jason245 Let's stick to discussing the topic at hand and keep this professional.
We are still waiting on objective facts to substantiate your claim as to why you think a recuse is not needed for board decisions made by management employees pertaining to selection of and auditing costs incurred by the management company.
We have shared substantiated data from lawyers (who specialize in this area) indicating that doing otherwise represents a conflict of interest here:
http://www.davis-stirling.com/ConflictsofInterest/tabid/1299/Default.aspx. Notes from the NY Attorney General's Office, and Florida law in this thread.
So far all we have heard from you is your opinion (and several personal attacks)...How do you know that HOA management employees are not recusing themselves from these decisions? What proof do you have that such board behavior is permissible in the eyes of the law?
From your source (Which you didn't seem to read in full since I was summarizing what I assumed you read in all my prior posts after you posted this link since you were quoting it)
"Conflicts of interest occur when a board member’s decisions are influenced by his/her personal interests rather than the interests of the association, which can lead to breaches of their fiduciary duties."
Click on Fiduciary duties
http://www.davis-stirling.com/tabid/1542/Default.aspx#axzz3liqSf3ZR
"Business Judgment. In determining whether directors violated their fiduciary duties, courts will use the Business Judgment Rule. To avoid potential breaches, boards should adopt an ethics policy to guide directors."
Click on Business judgment link
http://www.davis-stirling.com/tabid/1547/Default.aspx#axzz3krj3X7au
"orporations Code. Even though officers and directors are deemed fiduciaries, boards are not required to make the "right" decision. Corporations Code §7231(a) protects directors from personal liability if they make decisions that result in damage or loss to others, provided their decisions were made:
In good faith,
In a manner which the directors believe to be in the best interests of the corporation, and
With such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances."
Going back to your original example:
"Not a Conflict. Oftentimes board members vote on matters that result in a benefit to them that is not a conflict of interest because the matter also benefits the membership as a whole. For example, if a board member votes to add security patrols to the development, there is no conflict of interest since the benefit he receives from the patrol is same benefit received by all members of the association."
In summary your personal opinion of whether or not they are making a good decision is meaningless when it comes to them as elected members of the board making what they feel are the best decisions for the HOA. If they feel in good faith that the management company they work for (but does not provide them with any extra compensation or benefits for steering the business to the management company) is the best selection for the HOA, then they are operating within their rights as long as their employment is fully disclosed when they are running for office.
If they get elected by the owners, then it is on the owners for electing them (hint the management company is also an owner).
Given this 2 minute legal lesson, I am still waiting on you providing me with even a semblance of a legal argument as to why a duly elected board member who is not receiving any type of special compensation is required by any of the fiduciary duty requirements to recuse themselves from a vote on the management company and/or its contract.
To simplify you need to prove that they violated their duty of loyalty:
"We note that the duty of undivided loyalty applies when the board of directors of the association considers maintenance and repair contracts, the operating budget, creation of reserve and operating accounts, etc. Thus, . . . [directors] may not make decisions for the association that benefit their own interests at the expense of the association and its members." (Raven's Cove v. Knuppe.)
As a reminder, the members of the association include the management company (who generally ownes a large chunk of the units if it is DRI)
As for auditing costs... the BOD selects the INDEPENDENT auditor to audit the financials and provide an audit opinion. If a CPA is not independent they CAN NOT issue audited financials, and if they do, they are subject to lose of their license and fines. I am very confused as to where you are going with that one.
