QUESTION: A board member elected to our treasurer position is a twice convicted felon, one for burglary and one for criminal negligent homicide. The board claims this felon has paid his debt to society and therefore is trustworthy.

ANSWER: There is nothing in the law that prohibits felons from serving on boards. The Corporations Code states that boards may declare vacant the office of any director who has been convicted of a felony. (Corp. Code §7221(a).) However, the felony conviction must occur after the director has been elected to the board. Remillard Brick Co. v. Remillard-Dandini Co. (1952) 109 CA2d 405, 424.

Fidelity Bond. Associations should be aware of potential problems with their fidelity bond if they have a felon on the board, especially if that felon's conviction involved embezzlement or some form of theft. Many crime policies have an exclusion that preclude coverage in such situations.

RECOMMENDATION: In the event a felon is elected, the board should immediately contact their association's insurance broker for clarification regarding coverage. In addition, boards should consider amending their bylaws to avoid this situation. For assistance amending documents, contact us.