Directors Do Your Duty!
Recently, a blog reader wrote to tell me that three of the directors on his board refused to cast a vote to approve the association’s budget. Apparently these directors did not agree with the increase in assessments created by the new operating budget and, as a result, they decided not to vote at all when it came time to approve the budget. This reader wanted to know if these directors had the right to abstain from casting a vote.
The short answer is NO. Directors have an absolute duty to cast a vote one way or the other on association matters. Directors are elected to undertake the necessary work of the association which often includes casting votes on unpopular matters.
Directors who have a verifiable conflict of interest can abstain from a vote but the occasions when a conflict exists are tied to having a direct or indirect monetary interest in the matter being discussed. Items on which a director simply does not agree do not create a conflict of interest which would require or permit a director’s abstention from a vote. On those occasions not rising to the level of a conflict of interest, a director may request that his or her opinions be memorialized in the minutes but he or she must still cast a vote.
Section 718.111, F.S. states that a director of the association who is present at a meeting of its board at which action on any corporate matter is taken shall be presumed to have consented to the action taken unless he or she votes against such action or abstains from voting. A director of the association who abstains from voting on any action taken on any corporate matter shall be presumed to have taken no position with regard to the action. Directors may also not vote by proxy or by secret ballot at board meeting.
Thus, a director refusing to vote without the benefit of an actual conflict of interest which would permit an abstention is actually voting YES to the matter at hand by remaining silent.
Directors who routinely find themselves unable or unwilling to cast votes on unpopular matters must ask themselves why they agreed to serve on the board in the first place. Directors do your duty: it is ok to be wary about a particular subject matter but it is not acceptable to sit silent and allow your fellow directors to vote while you have no legitimate reason not to participate.