Limitations on Board Members
The responsibility of a board of directors of a homeowners association is to oversee the business of the association and establish policies. Just as boards have limited authority, so do individual board members.
Board members do not have the right to individually contact contractors and vendors or give them instructions or sign contracts without board authorization. Allowing multiple directors to interact with contractors and vendors will almost always result in higher costs to the association, conflicting instructions, and the potential loss of vendors and contractors. The best procedure is to direct matters through the board president to the association's vendors and contractors or though its managing agent. Board members who violate established procedures and disrupt operations may be censured by the board and may be subject to personal liability for their conduct.
Board members are also restricted in their ability to direct or discipline employees. These functions are reserved for the board as a whole or can be delegated to the board president or a managing agent. To allow individual directors to take such action is to invite potential liability.
Board members have a right to review books and records of the association but that right is limited. Individual directors' access to owner's records should be limited in order to preserve an owner's privacy. Even though the California Corporations Code gives directors the right to inspect all records, that right was modified by the court in Chantiles v. Lake Forest II. In that case the Court imposed a balancing test regarding the right of privacy vs. the right of a director to inspect records.
Even though individual directors cannot indiscriminately inspect members' files or personal records, the entire board may review an owner's or employee's file in connection with legitimate association business.
To maintain legal protections as volunteers, directors may not receive payment for serving on the board.