Corp. Code §8334 gives directors the absolute right to inspect all records of the association. Corporate records includes past and present:

• board minutes,
• executive session minutes,
• governing documents,
• financial records,
• vendor contracts,
• employee salaries,
• association tax returns,
• membership list,
• association insurance policies,
• correspondence,
• etc.

A director's "absolute right" has been limited by the courts so as to protect privacy, avoid conflicts of interest and protect attorney-client privilege.

1.  Privacy. In Chantiles v. Lake Forest, a candidate ran for the board and won but thought his friend should have won as well. As a new director, he wanted to inspect proxies to see how people voted. The board refused and he sued. The court agreed with the board and decided that privacy rights outweighed a director's "absolute" right to inspect records. Chantiles v. Lake Forest II.

2.  Conflict of Interest. In Tritek Telecom v. Superior Court, a board member in a nonprofit corporation sued the corporation. During the litigation, the director tried to exercise his "absolute" right to view the corporation's records related to his litigation against the corporation. The board refused citing attorney-client privilege. The Court of Appeal sided with the board. The court reasoned that a plaintiff director cannot take off his "shareholder's hat" and swap it for his "director's hat" and claim an absolute right to access all corporate documents when it would advance his personal interests against those of the corporation. Tritek Telecom v. Superior Court.

3.  Violation of Fiduciary Duties. A director's right to inspect may be denied where a disgruntled director announces an intention to violate his fiduciary duties. Havlicek v. Coast-to-Coast Analytical Services.

4.  Former Director. Former directors do not have any special inspection rights by virtue of their having been a director. Their inspection rights are the same as any other member of the association. As such, former directors do not have the right to inspect executive session or "director only" records. For HOAs, director-only records generally encompass executive session matters. Former directors continue to have the same inspection rights as other members but nothing more. An exception may exist if the former director is being sued for acts taken as a director and needs the records to defend himself. Wolf v. CDS Devco.

5.  Personnel Records. Whether individual directors can read an employee's personnel records has not yet been decided by the courts. However, there has been enough decisions related to privacy issues to indicate the probable outcome if the matter were litigated.

6.  Balancing Test. Because the courts use a balancing test, other records may be carved out of a director's inspection rights.

RECOMMENDATION: If a director has a conflict of interest or seeks to invade the privacy rights of others or seeks records for an improper purpose, the board should consult legal counsel before releasing records to the director.