Board or committee members who have a personal stake in the outcome of a decision or recommendation may face a conflict of interest. For example, the vice president’s brother works for one of the landscapers bidding on a contract with the association. If the vice president allows her personal concern for her brother’s welfare interfere with choosing the best landscaper for the association, she’s guilty of a conflict of interest. If she tells the board about her connection and abstains from voting on the landscaping contract, she’s acted properly and faces no liability.
Board members are usually cautioned to avoid even the appearance of a conflict of interest. Revealing any potential or perceived conflicts of interest is usually sufficient—transparency is the key. Depending on the situation, a board member may not need to abstain from a vote, but simply declare that a connection exists. For example, a board member may announce that he or she also contracts with the association’s landscape company for services at a vacation home.