HOA Blog : Board Process

Boozing Boards
October 7, 2008By By: Kelly G. Richardson

Kelly,
I am inquiring about two associations (I manage).  One Board starts drinking beer as soon as the Board Meeting begins, and the other starts drinking beer and hard liquor as soon as executive session begins. Their decision making and minutes would obviously reflect that they have been drinking since they both like to table necessary items or they are “happy drunks” and they just approve everything that is put under their nose.  What should I do?
 
It is an embarrassment to the association and me as their manager.
Best Regards, A. O., (Manager)
 
Dear A. O.:
How many ways is this a bad idea?

Board meetings should be conducted in a professional environment, and in a manner which inspires the confidence of the members in attendance.  Alcohol usage during the meeting does not enhance that.

Furthermore, directors are normally protected by the business judgment rule, which affords them immunity so long as they exercise reasonable business judgment, good faith, and reasonable inquiry.  Research as I like, I was unable to find any support for an “impaired business judgment rule.”  Seriously, if someone is using a judgment-impairing substance, it is going to be difficult to establish the reasonableness of that judgment.

If a board starts drinking as soon as closed session starts, I am particularly concerned.  Executive session is where the most serious concerns are addressed – contract negotiations, member discipline, personnel, and lawsuit issues.  If ever there a serious part of the board meeting, that would be it.  Unless the board is willing to disclose in the minutes that they are drinking during that part of the meeting, the party should wait until adjournment.

“G.U.I.”, or Governing Under the Influence, is always a bad idea.  Wait for the adult beverage until adjournment – then pop the corks.

Drinking alcohol, while perhaps making the meeting more pleasant for the directors, is a bad idea.

Good luck (and hope the board sobers up),
Kelly G. Richardson

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