Finance Committee
Adams Stirling PLC
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FINANCE COMMITTEE

QUESTION: We have a five member board. We have a six person finance committee. Four of the finance committee members are also board members. Does that present a conflict of interest?

ANSWER: It does not present a conflict of interest but it does create an Open Meeting Act issue. The Davis-Stirling Act defines "meeting" as:
A congregation of a majority of the members of the board at the same time and place to hear, discuss, or deliberate upon any item of business that is within the authority of the board. (Civ. Code §4090)
An "item of business" is defined to mean:
any action within the authority of the board, except those actions that the board has validly delegated to any other person or persons, managing agent, officer of the association, or committee of the board comprising less than a majority of the directors. (Civ Code §4155)
Any budget or finance matters discussed by the Committee will at some point be presented to the board for action. Accordingly, your Finance Committee meetings qualify as board meetings and need four-days notice to the membership plus the posting of an agenda.

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Adams Stirling PLC