What is the difference between the Board of Directors and corporate Officers? In the community association world there can be some confusion regarding these distinct corporate roles because they can often be the same individuals. However, if we take a step back we can see that they are actually very distinct roles. Here is some guidance as to North Carolina distinctions.
Board members are tasked with guiding the direction of the corporation. They set the broader vision for the corporation. For example, the Board would be responsible for adopting corporate resolutions, rules and regulations, and other policies and procedures to guide and implement how the corporation is governed. As a reminder, most community associations are organized as corporate entities, so while they may often be smaller, and a bit less formal than the national corporations we think about every day, they still follow corporate formalities and structure.
Officers run the day to day operations of the corporation. They are responsible for implementing and managing the policies and corporate vision adopted by the Board of Directors. Typically, most corporations have a President, Vice President, Secretary, and Treasurer who have very distinct roles as outlined in the corporation’s governing documents such as the bylaws and articles of incorporation.
In community associations, Board of Director members are elected by the association members, unless the declarant still has some appointment power, all as outlined in the association’s governing documents. Non community association corporations have Board members elected by the corporate shareholders.
Officers are generally not elected by the membership as whole, but are instead elected by the Board of Directors. Depending on the corporation’s governing documents, the Officers may not need to be members of the association. While many associations have Officers serving as Board members as well, that is not always the case. Therefore communities must be aware that Board members and Officers are wearing different “hats” when they are performing various corporate duties.
Similarly to an election, Board members are typically removed by the membership at large. This makes sense since Board members are elected by the membership, so their removal should be exercised by the same parties.
Officers on the other hand exercise the vision of the Board and are usually able to be removed and replaced by the Board members with or without cause. It is absolutely conceivable that if an Officer is also a Board member that they may be removed as an Officer, but still hold their position as a Board member.
One of our community association attorneys, Steve Black, wrote a recent blog on Removal of an Officer vs. Removal of a Board Member of a Community Association.
Board members vote on corporate decisions that are not reserved to the membership. To the extent Officers are voting, they are voting in their capacity as being Board members as well (if that is the case). Officers do not have independent voting powers.
Should you have questions regarding the distinction between the Board of Directors and Officers, reach out to one of our community association or corporate attorneys at Law Firm Carolinas.
Author: Adam Marshall
Articles have been Reprinted with permission from Black, Slaughter, Black.
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