INCREASING THE NUMBER OF DIRECTORS
Some associations allow everyone who runs for the board to serve as a voting director, even if it exceeds the number called for in the bylaws. Exceeding the authorized number is improper and creates the potential for a legal challenge.
Amend Documents. If associations want to increase the size of their boards, they must amend their bylaws. They may also need to amend their Articles of Incorporation and CC&Rs. Articles of Incorporation sometimes set the number of directors for the corporation. Older CC&Rs, especially if the association was originally unincorporated, will establish the number of directors (sometimes called a board of governors). All three documents must be examined if an association seeks to change the number of directors of its board.
Recommendation. If an association has a board consisting of three directors and wants to increase it to five, it should amend its documents to provide for either 3 or 5 directors rather than fixing the number at five. This gives flexibility in the event it cannot recruit enough directors to meet the higher requirement. staggered 2-year terms will affect the drafting of the provision. Boards should have legal counsel prepare the amendment.
REDUCING THE NUMBER OF DIRECTORS
Large boards with 7, 9, 11 or more directors are generally unwieldy and unjustified unless the association is very large. Small to moderately-sized associations usually have 5 directors, and very small associations usually have 3. Associations with too many directors will sometimes amend their bylaws to reduce the number to 7 or 5 directors.
Term of Office. Any reduction in the number of directors does not remove any director prior to the expiration of the affected director's term of office. (Corp. Code § 7222(c).)
Allowing All Nominees to Serve. Small associations sometimes allow everyone who runs for the board to serve on the board and vote, even if it exceeds the number directors called for in the bylaws. This is a violation of the bylaws and creates the potential for a legal challenge. Boards should keep to the number provided for in the bylaws, or amend the bylaws to allow for more directors.
Articles of Incorporation. In addition to amending the bylaws, any change in the number of directors might also require an amendment to the articles of incorporation. Articles should not set the number of directors but they sometimes do. Accordingly, associations contemplating a change in the number of directors should review both their bylaws and articles of incorporation.
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