This article is designed to give boards of directors and boards
of managers object lessons in how not to act in running their
cooperatives and condominiums. these are actual incidents. The
first two examples involve domineering presidents of boards and
should be a warning to all directors.
A King with Passive Counselors
A co-op, which had not consulted with its general counsel for
years, had a nine-member board that was run by the president and
two directors. The other six directors not only had no involvement
in operating the co-op, but were happily indifferent to co-op
issues. When a shareholder became a new member of the board, he
requested and was denied access to the co-op's books and
records. After an investigation, it was discovered that the annual
financial statements had not been prepared by a CPA, that the board
had almost no records concerning corporate activities, and that
there were no board meeting minutes since there had been very few
meetings.
