Why All Condominium Board Members Should Sign a Directors' Code of Ethics


While the adoption of a code of ethics is commonplace among condominium boards, many of the members who are asked to sign them may wonder whether it really makes a difference in their own behavior and actions, or in those of their fellow board members.

When considering the value of directors' codes of ethics, it's important to remember that condominium boards are governed primarily by volunteer directors with minimal training concerning the fiduciary duties and ethical dilemmas they may face. This lack of training can sometimes lead to questionable decisions that may seem to benefit the individual more than the board.

Presenting board members with a directors' code of ethics can help identify unacceptable behaviors before they even arise, and requiring a signature provides a way of receiving acknowledgment that board members are aware of the ways in which their ethical choices impact those around them. Not only can a code of ethics serve as a constant reminder for those on the board, but it can also potentially help screen for board members with hidden agendas.

Condo boards should be proactive and adopt a directors' code of ethics as soon as possible for the following reasons:

  • Keep board members accountable and honest: While it may seem obvious that honesty is vital for those in leadership roles, detailing requirements in a formal code of ethics helps ensure that all board members can be held accountable for any unethical behavior.
  • Preventing conflicts of interest: A conflict of interest can arise when a director is put in a position that can potentially lead to an opportunity to prioritize their best interest above those of the board. This is especially risky when board members or their relatives serve as vendors for the board, such as by providing repair or landscaping services. A code of ethics can require board members to disclose any potential conflicts of interest and prevent any murky ethical situations. Should a conflict occur, the code of ethics can provide a clear outline for how the violation should be handled.
  • Good conduct: Board members should serve as an example for proper behavior to the rest of the board. Their actions also set the standard for the rest of the community. Including a conduct clause in a directors' code of ethics establishes an expected level of conduct for all board members and can serve to prevent any questionable behavior by highlighting standards concerning what is and is not acceptable.
  • Minimize conflict: Establishing a directors' code of ethics provides the perfect opportunity to outline the steps to be taken if conflict occurs between those in the community. When an issue arises between community members or members of the board, it is important to resolve the conflict in a fair manner using an established process. By having the regulations and steps outlined in the code of ethics, there is less ambiguity regarding how a conflict should be resolved.

It is crucial to tailor a directors' code of ethics specifically to the needs of your condominium board. When establishing the code, remember to incorporate general and broad aspects, but also to look at any previous issues that have occurred and account for those as well. Finally, a board should always consult with an attorney to analyze any existing bylaws and to ensure the code of ethics legally addresses any ethical issues the directors may face.