Chapter 7 - § 7.11 • REMOVAL OR RECALL OF BOARD MEMBERS

• Jurisdiction: Colorado

§ 7.11 • REMOVAL OR RECALL OF BOARD MEMBERS

Directors may be removed by the voting members, the board, or a court. Attempts to remove directors — or "recall," as it is more often called — in common interest communities occur surprisingly often, although many attempts are unsuccessful. While both the Nonprofit Corporation Act and the CCIOA address removal of directors, neither does so adequately. The bylaws, therefore, must thoroughly address the issue to prevent exacerbation of what is usually already a volatile situation.

Usually in a common interest community, removal or recall of directors is initiated by a group of voting members dissatisfied with some or all of the directors. That dissatisfaction may be generalized, but more often is connected to a single issue: a large special assessment or an unpopular rule. The Nonprofit Corporation Act provides that directors elected by the voting members or by directors may be removed by voting members with or without cause unless the bylaws provide that directors may be removed only for cause.¹⁰⁸ While it might seem on the surface that requiring that removal be for cause has merit, it is in reality usually a bad idea, especially in a residential community since emotions run high. Generally, if the majority of owners no longer support some or all directors, it is best for the community to replace those directors, and to do so without publicly stating a specific reason.

Removal of a director¹⁰⁹ who was elected by voting members must take place at a meeting called for the purpose of removing that director. The meeting notice must state that the purpose, or one of the purposes, of the meeting is removal of the director.¹¹⁰ Except when cumulative voting for directors is in effect,¹¹¹ a director may be removed under the Nonprofit Corporation Act only if the number of votes cast to remove the director would be sufficient to elect that director.¹¹² The CCIOA, however, requires a 67 percent vote. Specifically, the applicable statute says that, notwithstanding any provision of the declaration or bylaws to the contrary, the owners, by a vote of 67 percent of all persons present and entitled to vote at any meeting of the owners at which a quorum is present, may remove any member of the governing board with or without cause, other than one appointed by the declarant or elected pursuant to a class vote.¹¹³ Thus the CCIOA statute conflicts in two aspects with the Nonprofit Corporation Act. First, because in most cases the number of votes sufficient to elect a director would be a simple majority, the 67 percent requirement is contradictory. Second, the Nonprofit Corporation Act allows the bylaws to limit removal only to instances where there is cause, whereas the CCIOA says a director may be removed with or without cause, the declaration or bylaws...