An “executive session” board meeting is basically a board meeting that is not open to attendance by the homeowners. State statutes that mandate board meetings be open to attendance by all homeowners typically include provisions that allow for and specify the circumstances under which an association’s board of directors can convene in executive session to the exclusion of all non-director homeowners (with the exception of homeowners who are involved in a matter that is on the agenda for the executive session meeting and are entitled to be present for the portion of the meeting that involves their matter). Association business that does not involve issues that must be handled in executive session meetings is addressed in board meetings that are open to all of the association’s members. Matters that state statutes typically provide for discussing in executive session board meetings include:
a. Matters involving legal issues such as actual or pending litigation;
b. Matters relating to the formation of contracts with third parties;
c. Matters relating to the imposition of discipline against a homeowner;
d. Matters involving personnel (i.e. promotions, hiring, firing, discipline and performance reviews);
e. Matters involving a meeting requested by a homeowner for the purpose of discussing a payment plan for amounts owed to the association by the member;
f. Matters relating to a decision by the directors to initiate foreclosure proceedings against a homeowner’s property;
g. Matters involving privileged or confidential consultation with the association’s legal counsel;
h. Matters involving possible or actual criminal misconduct;
i. Matters that are subject to specific constitutional, statutory, or judicially imposed requirements that are designed to protect certain proceedings or matters from public disclosure;
j. Matters where disclosure of information would constitute an unwarranted invasion of individual privacy.
Association boards must keep minutes of the proceedings that are conducted in executive session. The actual minutes of the executive session meeting, copies of which are not distributed or made available to homeowners (outside of a requirement for their production in connection with litigation), must contain a complete overview of what was done at the meeting (not what was said) in a format that is similar to the minutes that are maintained for the open session board meetings.
It is also common for state statutes and association governing documents to require that, in addition to the separate minutes of the executive session meeting, the association’s board must include a summary of what business was conducted in the executive session meeting in the minutes of the next open meeting of the association’s board of directors. To comply with this requirement, the minutes of the first open session of the association’s board that takes place subsequent to an executive session board meeting should include a statement that an executive session was held on a specific date and the general subject matter that was addressed in that executive session meeting. A sample of such a provision that could be included at the end of the minutes of an open board meeting would be as follows:
Summary of Executive Session Board Meeting Conducted on _______ [insert date]
The Board of Directors met in Executive Session on _____________ [insert date] at __________ [insert time] and took the following action:
1. Legal Issues
a. Discussed lawsuit threatened by member with legal counsel.
b. Discussed possible lawsuit against member to enjoin continuing violations of covenants.
2. Formation of Contracts
a. Reviewed bids received from 3 contractors for repaving of roads.
b. Approved a contract for repaving of roads.
3. Personnel Issues
a. Discussed complaints by homeowners regarding behavior of security guard.
b. Approved termination of security guard.
4. Imposition of Discipline
a. Conducted a disciplinary hearing with a homeowner regarding an alleged violation of the association’s architectural guidelines and rules.
b. Approved the imposition of a fine against a homeowner for violations.
c. Approved suspension of a fine against a homeowner.
5. Foreclosure Proceedings
a. Approved the initiation of foreclosure proceedings against parcel no _______________ [insert Assessor’s parcel number that identifies the property not the homeowner’s name] for nonpayment of delinquent assessments.
Because state statutes concerning the subject matter for executive session meetings and the manner in which executive session meetings must be documented in minutes may vary, it is important for association management personnel to review their governing documents and applicable state statutes and/or consult with their legal counsel to get a clear understanding of the types of matters that can be discussed in executive session board meetings and any specific requirements relative to the maintenance of the minutes of executive session meetings . An association’s minutes of its board meetings are the official record of the proceedings conducted by the association and they are frequently relied upon for many different purposes including litigation. The importance of maintaining proper minutes of both open meetings and executive session meetings of an association’s board of directors cannot be overstated.