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OFFICERS, RESIGNATIONS & VACANCIES

Organizational Meeting. An "organizational meeting" usually occurs immediately after the election of directors at the annual meeting and is listed on the annual meeting agenda. It gives new directors an opportunity to elect officers. An organizational meeting is an open meeting. If it is not held at the annual meeting, notice of the organizational meeting must be given to the membership in the same manner as any other open meeting.

Officers Selected by the Board. Directors are elected by the membership, while officers are named by the board to lead meetings, keep minutes, oversee financials, etc. Officers are required by statute but being an officer does not give one the power to vote. In many sets of bylaws, officers need not be directors. When directors cast votes, they may incidentally be officers but when they vote, they vote as directors, not officers. The president, vice president, secretary and treasurer are allowed to vote if they are directors--but they are doing so as directors, not officers. Following are the differences between directors and officers 

DIRECTORS OFFICERS
1. Elected by the membership.
2. Serve terms described in bylaws.
3. Qualifications described in bylaws.
4. Can be removed by the membership.           
5. Have voting rights.
1. Appointed by the board.
2. Serve at the pleasure of the board.
3. Qualifications described in bylaws.
4. Can be removed by the board.
5. Have no voting rights.


Multiple Offices. For nonprofit mutual-benefit corporations (which is the form of incorporation for most associations), any number of offices may be held by the same person unless the articles or bylaws provide otherwise. (Corp. Code § 7213(a).) Accordingly, one director may hold multiple offices, such as President-Secretary, Secretary-Treasurer or Vice President-Treasurer, etc. but cannot hold multiple director seats. Boards should check their governing documents to see if their are restrictions on directors holding multiple offices.

One Vote Per Director. It does not matter that a director is also an officer--it does not give him/her an extra vote. If the board consists of five directors, it has one for each director. "[Officers] cannot vote twice, once as a member, then again . . . [as an] officer." (Robert's Rules, 11th ed., p. 406.) Following is a table contrasting the differences between officers and directors.

1.  REQUIRED OFFICERS
Incorporated associations are required to have the following officers: president, secretary and treasurer. (Corp. Code § 7213(a).)  An association's bylaws should list the officers, which may include additional officers, such as a vice president. The bylaws should also give a basic description of each officer's duties:

Vice President. The person selected by the board to serve as vice president serves at the pleasure of the board. The bylaws should describe the duties of the vice president. Normally, those duties are as follows, (i) performs the duties of the president in the president's absence; and (ii) may be called upon by the president to share some of the president's duties.

Member at Large. There is no office position called director at large or member at large. As provided for in Corporations Code § 7213(a). Robert's Rules of Order recognizes many offices but no director at large. (Robert's Rules, 11th ed., pp. 447-468.) Even so, many in the HOA industry use the term to describe a director who is not an officer. A director at large has the same voting rights as all other directors but without the extra duties associated with being an officer. In non-HOA corporations, the title refers to a director who does not participate in the day-to-day management of the company and is sometimes referred to as an independent or outside director.

2.  SELECTING OFFICERS
Selecting officers is normally done at an organizational meeting immediately following the annual meeting but may be done at a later date subject to any time requirements that may be contained in the governing documents. The selection of officers is done at an open meeting since it does not qualify as an executive session meeting. Accordingly, members have a right to attend the meeting and observe the process.

Chosen by the Board. Unless the bylaws provide otherwise, officers are chosen by the board, not the membership. (Corp. Code § 7213(b).) No one person on the board, such as the president, has the right to select the remaining officers. Officers are determined by a majority vote of the board.

Partial Change in Board. A partial change in the board from a membership election triggers a new election of officers.

Qualifications. Unless required by the governing documents, officers need not be members of the board or members of the association. Officer qualifications are normally found in the bylaws.

Nominations. Nominations for each office (president, vice president, secretary and treasurer) are made by board members, not the membership. No second is needed for nominations. (Robert's Rules, 11th ed., p. 432.) Directors may nominate themselves if they wish. Since the Davis-Stirling Act allows members to nominate themselves to run for the board, it would be reasonable to allow self-nomination as officers. (Civ. Code § 5105(a)(3).) Each nomination is then voted on by the board not the membership.

Conducting the Vote. The vote is frequently done by voice vote but may be done by secret ballot if one or more directors request it. If done by secret ballot, each director simply writes the name of the person they are voting for on a slip of paper. Inspectors of Election are not required for counting these ballots. Each director can hand his/her ballot to the manager (or some other person) to open and read out loud. The person with the most votes wins the office. The process is repeated for each officer until all positions are filled.

Voting for Oneself. All directors may participate in the voting for officer, including those directors who are nominees for the office at issue. "The rule on abstaining from voting on a question of direct personal interest does not mean that a member should not vote for himself for an office . . ." (Robert's Rules, 11th ed., pp. 407-408.)

3.  TERM OF OFFICE
Officers serve at the pleasure of the board but most often for one-year periods, i.e., until the next annual meeting or until changed by the board mid-term. This is true even if only part of the board is elected each year.

Staggered Terms. A growing number of associations now have two-year or three-year staggered terms for their directors (depending on the size of the board). As a result, a portion of the board rather than the entire board stands for election each year. A director who has a two-year or three-year term can serve as president, secretary, or treasurer for their entire term as a director but not necessarily Unless the bylaws state otherwise, all offices (president, secretary, treasurer) automatically end with the election of new directors at the annual meeting, even if the change on the board is partial. The new board can confirm existing officers or name new ones.

EFFECT OF PERIODIC PARTIAL CHANGE IN BOARD MEMBERSHIP. In cases where a board is constituted so that a specified portion of its membership is chosen periodically (as, for example, where one-third of the board is elected annually for three-year terms), it becomes, in effect, a new board each time such a group assumes board membership. ... it chooses new officers and committees as soon as the new board members have taken up their duties, just as if the entire board membership had changed. The individual replacement of persons who may occasionally vacate board membership at other times, however, does not have these effects. (Robert's Rules, 11th ed., pp. 488-489.)

Appointments. The individual appointment of directors who may vacate the board mid-term does not have the effect of automatically ending officer terms and committees.

4.  RESIGNATIONS
Any officer may resign at any time upon written notice to the board. (Corp. Code § 7213(b).) The resigning officer continues to be a director on the board unless he/she also resigns from the board. 

<date>

Dear Fellow Directors,

Please accept my resignation as President [or Secretary or Treasurer, etc.] of the Board. I will continue to serve as a director.

My resignation takes effect  <immediately>  or  <date and time>  or  <upon the appointment of a successor officer>.

signature: _______________________
   


5.  CHANGING OFFICERS
Officers are required by statute but because they are appointed by the board, they serve at the pleasure of the board. (Corp. Code § 7213(b).) As a result, boards can change officers at any time, with or without cause. If a board decides that a director serving as president, secretary or treasurer has become disruptive or is no longer effective, the board can remove the person from office and appoint another to fill the position. No warnings need be given and no hearings held since changing an officer does not fall under the umbrella of rules violations and monetary penalties.

Agenda Item. The appointment of new officers takes place in duly noticed open session board meeting. However, discussion may take place privately in executive session if the matter involves potential legal issues. Depending on the circumstances, the change in officers can be made at a regular board meeting, a special meeting, or an emergency meeting.

Removed Officers. Removing a director from an office is not the same as the board declaring a seat vacant or the membership recalling a director. Directors who are removed as an officer (President, Secretary, Treasurer) continue to serve on the board with all of the rights and privileges of a director.

6.  FILLING VACANCIES
Unless otherwise provided in the articles or bylaws, a vacancy created by the resignation, removal or death of an officer is filled by approval of the board. (Corp. Code § 7213(b).) This general principle is also described in Robert's Rules of Order:

The power to appoint or elect persons to any office or board carries with it the power to accept their resignations, and also the power to fill any vacancy occurring in it, unless the bylaws expressly provide otherwise. (Robert's Rules, 11th ed., p. 467.)

By a majority vote, the remaining directors fill officer vacancies. The president may participate in the process but does not have the power to be the sole determiner in the selection of replacement officers.

No Officer Election Required. The individual replacement of persons who may occasionally vacate the board membership does not trigger a new election of officers. (Robert's Rules, 11th ed., pp. 488-489.)

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

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