The Importance of a Code of Conduct

Given the reality that most people who serve as the volunteer directors of a homeowners’ or condominium owners’ association have little or no experience in serving on a corporate board, or in managing a complex business, or dealing with employees and/or a management company, a Code of Conduct can serve as a useful reference tool for directors and a reminder of their duties and responsibilities. A Code of Conduct also provides the rest of an association’s board members and management personnel with something to refer to when issues arise concerning a particular board member’s conduct.

A Code of Conduct for the directors of a homeowners’ or condominium owners’ association should include:

• A statement of board and director responsibilities;
• Prohibitions on self-dealing;
• The obligation of directors to maintain the confidentiality of sensitive or privileged communications;
• Standards of deportment in any interactions with the association’s employees or the management company; and
• Remedies available for a director’s violation of the requirements of the Code of Conduct.

Typically, the range of sanctions or disciplinary responses to alleged violations of an association’s Code of Conduct begin with a simple reprimand by the board, and progress to a formal resolution of censure, and perhaps removal from office for particularly egregious violations.

A central question for boards to consider is when adopting a Code of Conduct is: