. Executive sessions of the board of directors are provided by statute so boards can address issues involving privileged information and matters of a private nature. As a result, members do not have a right to attend executive sessions. As provided for in Civil Code §4935
, boards may go into executive session for the following matters:
1. Legal Issues. Boards may go into executive session “to consider litigation…" Merriam-Webster’s Dictionary defines consider as “to think about something or someone carefully especially in order to make a choice or decision.” Black’s Law Dictionary defines litigation as “A lawsuit. Legal action, including all proceedings.” Based on these definitions both actual and pending litigation fall under the executive session privilege. Meeting in executive session preserves attorney-client privilege,
litigation strategy and settlement strategies for current and potential
litigation matters. The association's attorney does not need to be
present for the board to meet and discuss legal issues. Form of Meeting
2. Formation of Contracts. Boards may consider matters relating to the formation of contracts with third parties.
3. Disciplinary Hearings. Boards should meet in executive session for all disciplinary hearings. The accused member is entitled to attend the executive session for that portion of the meeting dealing with member's hearing.
4. Personnel Issues. Personnel matters which include, but are not limited to, hiring, firing, raises, disciplinary matters and performance reviews.
5. Payment Plan. Board may meet with members in executive session to discuss requests by delinquent members for payment plans.
6. Foreclosure. The decision to initiate foreclosure shall be made only
by the board of directors of the association and may not be delegated to an agent of the association. The board must approve the decision by a majority vote of the directors in executive session. (Civ. Code §5705(c).)
. Executive session meetings can be held by any of the following methods:
Who May Attend
In Person. Directors can meet in person at a physical location.
Email meetings are prohibited except for emergency meetings.
Telephone-Video. Directors can meet via telephone or video conference. (Corp. Code §7211(a)(6).)
Unanimous Written Consent. A "unanimous written consent" may be used for emergency actions.
. As noted above, members do not have a right to attend executive session meetings. However, that does not mean the meetings are limited to directors only. Directors, managers, recording secretaries, the association's attorney, members subject to disciplinary action as well as witnesses (but only for that portion of the meeting involving the disciplinary hearing), and others invited by the board (such as vendors bidding on a project) may attend an executive session meeting.
Scheduling the Meeting
. Unless otherwise provided in the
articles or in the bylaws, executive board meetings may be called by the
chairman or president or any vice president or the secretary or any two
directors. (Corp. Code §7211(a)1
.) An emergency meeting of the board may be called by the president or by any two members of the board other than the president. (Civ. Code §4923
) Email discussion of director availability for the meeting as well as the date and time for the meeting is allowed. Scheduling discussions are not deemed "board meetings" and do not violate the Davis-Stirling Act.
Notice to Members
. Starting January 1, 2012, members must be given notice of executive session meetings of the board. This is required regardless of anything to the contrary in an association's governing documents
1. With an Open Meeting. If executive session is held with a scheduled open meeting of the board, it must be included in the open meeting's four-day notice and generally noted in the open meeting agenda.
2. Between Open Meetings. If a meeting is to be held solely in executive session, members must be given notice
of the time and place of the meeting at least two days prior to the meeting. Notice must be posted in a prominent place or places in the common
areas and by mail to any owner who had requested notice by mail (at the address requested by the owner). In addition, notice may be given by mail, by delivery of the notice to each unit in the
development, by newsletter or similar means of communication, or, with
the consent of the member, by electronic means. (Civ. Code §4920(b)(2).)
Notice of an executive session meeting must contain an agenda for the meeting. (Civ. Code §4920(d)
.) Because executive sessions are confidential and topics are only generally
noted in open meeting minutes (§4935(e)
), agenda descriptions should be brief and general in nature. See sample agenda
. Boards must keep minutes
of their executive session meetings and generally note their sessions in the minutes of the next open meeting of the board.
Violation of Confidentiality
. Directors who violate the confidential nature of information gained in executive session are subject to censure
, and personal liability for their behavior, i.e., they lose the protections of the Business Judgment Rule
. Except for attorney-client privileged
discussions, executive session minutes, documents, information and discussions are discoverable during litigation.
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