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April 01, 2019

Ask Maria - Resolving ethical dilemmas

Putting in place a Code of Ethics helps condo boards resolve disputes

Maria Bartolotti

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Q:Desr Maria; How important is it for an elected Officer or Director to maintain confidentiality of Board decisions?


A:
Very important is the correct answer. We need only look at the current political scandals in Canada and the U.S. to see how important it is to conform to a code of ethics.

Boards have an obligation to act honestly and in good faith and in the best interest of the condominium corporation. If the board chooses not to follow the standard of care, this can put the condominium corporation in a position of liability.

In addition, the board of directors must exercise care, diligence and skill that a prudent person would exercise in comparable circumstances. In other words, not putting the condominium corporation in harms way and always acting with prudence when making decisions.

Once elected, the condominium board of directors have specific and critical duties that they must adhere to. These duties are listed in the condominium corporation bylaws. It’s important for board members to understand and be familiar with the bylaws, since they will be held accountable to them and the owners.

It’s also recommended that boards implement a Code of Ethics that can be signed by all members of the board. A Code of Ethics will set clear and precise guidelines that members of the board can follow, and it will help set the framework of how to handle conflicts within their condominium community.

For example: if a director has a relative they want to hire to complete a certain project at the condominium or in the insistence where a director is in breach of a bylaw. The Code of Ethics can help determine the best course of action to address that particular situation.

It can be overwhelming and time consuming for a board to create a code of ethics. So let me help set you in the right direction. New Concept Management Inc. recommends some, if not all of the following to be included in your code of ethics.

• Honesty and Good Faith       

• Care, Diligence and Skill   

• Conflict of Interest

• Confidentiality

• Good Conduct

• Education

• Abuse of Proxies

• Support

• Defamation

• Minimize Conflict

• Performance of Duties

• Scope of Authority

• Agreement

• Unsanctioned Board Meetings

When you as a board create your code of ethics, be sure to define in detail and set the parameters for each of the codes. This way, there is clear understanding behind the meaning of the rules. Also, don’t forget to sign and date your code of ethics.

Until next time …

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