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FELONS ON THE BOARD

Unless an association's governing documents state otherwise, convicted felons are not automatically precluded from serving on boards. Even so, association's can exclude them from serving on the board.

Corporations Code. Corporations Code §7221(a) allows a board of directors to declare vacant the seat of a director who was convicted of a felony, regardless of whether the criteria is part of the association's governing documents. The statute does not consider the nature, or recency of the criminal conduct, only its severity, i.e., that it be a felony. However, removal of a director is not mandatory and a board may wish to consider the nature and recency of the conviction. For example, a director convicted of felony auto theft 30 years ago, at the age of 17, should not concern the board as much as a director recently released from prison from a felony embezzlement conviction five years ago.

Fidelity Insurance. Boards have good reason to keep felons from serving on the board, especially if the conviction involved embezzlement or some form of theft. Associations should be aware of potential problems with their fidelity bond if a felon were to serve in any capacity that involved access to the association's funds. Many crime policies have an exclusion that preclude coverage in such situations.

Recommendation. Associations should consider amending their bylaws to avoid this situation. It can be done through a formal amendment approved by the membership or a change in director qualifications via a change in the election rules approved by the board.

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