2-Minute Video
Executive Session Agenda
Notice of Meeting + Agenda. If a nonemergency board meeting is held solely in executive session, the association shall give notice of the time and place of the meeting at least two days prior to the meeting. (Civ. Code § 4920(b)(2).) Notice of an executive session meeting must contain an agenda for the meeting. (Civ. Code § 4920(d).)
Agenda Items. Because executive sessions are confidential and topics are only generally noted in open meeting minutes (Civ. Code § 4935(e)), agenda descriptions should be brief and general in nature. See sample agenda. Boards may not take action on any item at a non-emergency meeting unless the item was placed on the agenda included in the notice given to the membership. (Civ. Code § 4930(a).)
Emergency Agenda Items. If an item of business comes to the attention of the board after the agenda is distributed, and if a majority of the board present at the meeting determines that an emergency situation exists, it can be added to the agenda at the meeting. An emergency is defined as "circumstances that could not have been reasonably foreseen by the board, that require immediate attention" and making it impracticable to provide notice. (Civ. Code § 4930(d)(1).)
Allowable Topics
Executive sessions of the board of directors are provided by statute so boards can address confidential matters. Because they are confidential, members do not have a right to attend the meetings or to review executive session minutes. As provided for in Civil Code § 4935, boards may go into executive session for the following five enumerated matters.
1. Litigation. 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 threatened and pending litigation fall under the executive session privilege. See Reporting Litigation to the Membership.
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 the member's hearing.
4. Personnel Issues. Personnel matters include anything involving employees including, but not limited to, hiring, firing, raises, disciplinary matters, performance reviews, and adopting or amending employee policies. Filling officer or director vacancies and appointing or removing committee members do not qualify as personnel matters. They need to be done in an open session.
5. Payment Plans. The board may meet with members in executive session to discuss requests by delinquent members for payment plans.
OTHER ISSUES. The above list of topics is not exhaustive and does not exclude other matters that require confidentiality. For example:
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.
7. Disability Requests. When a disabled person requests reasonable accommodation for their disability. California Code of Regulations 12176(b)(1) requires, "All information concerning an individual’s disability, request for an accommodation, or medical verification or information must be kept confidential and must not be shared with other persons..."
8. Mental Illness. When a resident has a mental illness that is impacting other members of the association, such as hoarders.
9. Director Censure. When a director is disrupting meetings, violating confidentiality, harassing vendors and/or staff, etc., the board may need to discuss possible censure of the director. This may involve legal issues, which also puts it under one of the six Davis-Stirling topics for executive session discussions.
10. Termination of a Contract. Boards may not want a vendor to know that it is contemplating the termination of the vendor's contract. There may be legal ramifications that need to be discussed with legal counsel. Although terminating a contract is not one of the approved categories for executive session, canceling contracts should be done in executive session. Before ending a contract, boards often engage in a wide-ranging discussion about problems with the contractor, possible legal consequences related to the termination, and input from legal counsel on how best to minimize legal exposure (potential litigation is one of the approved reasons for discussing matters in executive session). If the debate about terminating a contract were done openly, it would compromise the association's legal position and expose the board to potential claims from the contractor. Accordingly, discussions related to the termination should take place in executive session. Anytime the board contemplates terminating a contract, it should get the advice of counsel.
11. Potential Liability Issues. There may be other issues of concern over potential liability that need to be discussed with legal counsel. Non-litigation matters, such as legal opinions related insurance, personnel, maintenance, easements, recalls, etc. would also be appropriate topics for executive session. Whenever the association's attorney is giving legal advice to the board, it is protected under Evidence Code §§ 950-962.
Duty of Confidentiality
Board members must keep confidential information confidential. The authority to release information is held by the board as a whole, not by individual directors. Once the information is released, it cannot be taken back. Accordingly, directors who release information without board approval could face significant consequences.
Directors who violate their duty of confidentiality regarding 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. They might also be excluded from future executive session meetings by the formation of an executive committee. For more information, see Fiduciary Duties.
Who May Attend Executive Session
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 legal counsel, 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 executive session meetings.
Form of Meeting, Scheduling & Notice
Executive session meetings can be held by any of the following methods:
Scheduling the Meeting. Unless otherwise provided in the articles of incorporation 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.
- 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.
- Between Open Meetings. If a non-emergency 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 (2) days prior to the meeting. (Civ. Code § 4920(b)(2).) If an association's governing documents require a longer notice, they must be followed. (Civ. Code § 4920(b)(3).)
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. (See Notice of Meetings.)
Also see Notice of Adjourned Meetings.
Voting
Boards can vote on matters in executive session. They are not required to convene into an open meeting to cast their votes. For example, if a board meets with the association's attorney to discuss a pending mediation and authorizes settlement at a certain dollar amount, the vote should be done privately. To require that this vote be done in an open meeting would make negotiations impossible since the board's negotiating position would be published to the entire community. As the Court of Appeals noted:
It is no secret that crowds cannot keep them [secrets]. . . . "[o]ne can only imagine the sleepless nights an attorney and the Board of Directors may incur if privileged information is placed in the hands of hundreds of homeowners who may not all have the same goals in mind." (Smith v. Laguna Sur Villas.)
Executive Session Minutes
An executive session meeting is a proceeding of the board of directors. California law requires that boards keep minutes of their executive sessions. "Each corporation shall keep minutes of the proceedings of its . . . board . . ." (Corp. Code § 8320(a)(2).) Such minutes are also referenced in various places in the Davis-Stirling Act. (Civ. Code § 4950(a), § 5200(a)(8), § 5215(a)(5)(D).) In addition, they must generally note their sessions in the minutes of the next open meeting of the board. The board's actions are then generally noted in the minutes of the next open meeting (such as: "The board discussed issues related to the pending mediation."). (Civ. Code § 4935(e).)
Content of Minutes. Executive session minutes should reflect the deliberation and reasoning behind actions taken by the board in executive session. For example, if the board gave the manager a warning, the minutes should reflect what occurred. The minutes might state that "The Board expressed dissatisfaction with the manager's performance and gave the manager a written warning that failure to resolve tardiness and absenteeism would result in her dismissal. The board voted not to renew the manager's one-year contract and made the manager's employment at-will." For additional information on meeting minutes content, see "HOA Meeting Minutes."
Approval of Minutes. Executive session minutes may be approved at the board's next open meeting or executive session. However, the risk with open-meeting approvals is that the board may need to discuss corrections or revisions to the minutes, which could result in the disclosure of confidences and/or waiver of attorney-client privilege. Accordingly, discussion of any changes to executive session minutes should take place in executive session.
No Distribution and No Right to Inspect. Minutes of executive sessions should NOT be distributed to the membership. (Civ. Code § 4950(a).) These minutes are separate from open meeting minutes since members have no right to inspect them because of the confidential information contained in them related to litigation, personnel matters, disciplinary actions against members, and foreclosure actions. Even though members do not have a right to review and copy executive session minutes, boards should know that such minutes are discoverable in litigation.
Minutes Are Confidential But Not Privileged
Although executive session minutes are confidential, they are not necessarily privileged. The Davis-Stirling Act does not address the issue of litigation discovery. However, it states that executive session minutes are not reviewable by the membership. In general, once litigation has been initiated, any matter may be discoverable if it is relevant to the subject matter of the litigation and not privileged. (Code Civ. Proc. § 2017.010.) That means executive session minutes may be discoverable during litigation.
Redacting. Any privileged information, as well as information reasonably likely to compromise the privacy of an individual member of the association, can be redacted. Associations may withhold or redact information that is “subject to attorney-client privilege or relating to litigation in which the association is or may become involved” (Civ. Code 5215(a)(3)); “[t]he release of the information is reasonably likely to compromise the privacy of an individual member of the association” (Civ. Code 5215(a)(4)); or contains records of money received by the association, not from assessments, disciplinary actions, collection activities, or member payment plans, any person’s personal information (e.g., social security numbers, credit card numbers, bank information, etc.), or “[m]inutes and other information from executive sessions of the board” (Civ. Code 5215(a)(5)(A)-(D).)
Privacy. While the right to privacy is not absolute, courts balance the interests of each side in obtaining or protecting the information, consider the purpose of the information sought, the effect the disclosure will have on the parties, the nature of the objections, and the availability of alternative, less intrusive means for obtaining the requested information. (Hooser v. Sup. Ct. (2000), 84 Cal.App.4th 997, 1005.) The more sensitive the nature of the personal information sought, the greater the showing of need required before disclosure will be permitted. (Hooser, 84 Cal.App.4th at 1004.)
Recorded Meetings. Boards should not record their executive sessions (or should dispose of the recordings once minutes have been prepared). Electronic recordings may be subject to a subpoena in future litigation. If the board has recorded their meetings and reasonably believes those recordings will be subpoenaed in a pending legal action, the recordings must be preserved.
Draft Minutes. Keeping executive session minutes in draft form does not shield them from discovery. If the association is sued and the plaintiff subpoenas all documents related to executive sessions, boards must produce them, whether in draft or final form, signed or unsigned. Boards should always prepare executive session minutes with an eye to how they would sound to a jury if read aloud in open court.
Recommendation: Boards should make sure their executive session minutes are accurate and appropriate since they could, at some point, be read aloud in open court. In addition, litigation discovery is complicated, and associations should work closely with their litigation counsel regarding any document requests made in a lawsuit.
Open Meeting Minutes
Even though members do not have the right to attend executive sessions, boards must keep members informed about the general nature of the business conducted in their executive sessions. The minutes of the following open board meeting must generally reflect the board's executive session: "Any matter discussed in executive session shall be generally noted in the minutes of the immediately following meeting that is open to the entire membership." (Civ. Code § 4935(e).)
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