Q&A: Superintendent on Board of Directors

Q Can we have a superintendent on the board of directors although he is not a shareholder? Is this a conflict of interest? What are the pros and cons of an employee being on the board?

—Confused & Conflicted

A “There is no prohibition against a superintendent of a cooperative being on the board of directors in the Business Corporation Law,” says Albert F. Pennisi, Esq., a partner with the law firm of Pennisi, Daniels & Norelli, LLP in Rego Park. “A review of the corporate documents would have to be made to determine if the certificate of incorporation or the bylaws prohibit an employee of the corporation from being a member of the board. In addition the bylaws in some instances prohibit a non-shareholder from being a member of the board of directors.

“The benefits of a superintendent being on the board of directors is he/she has intimate knowledge of the mechanical systems, maintenance and operations of the buildings and may speak with some expertise as to repairs, equipment, systems and capital improvements to the other members of the board of directors.

“The downside of a superintendent being on the board of directors is that: a) he/ she is an employee subject to the direction and control of the board of directors and the managing agent who can or may have a relationship with other tenants, shareholders or residential rental tenants in the building, which may cloud his/her judgment; and, b) he/she may have a hidden agenda which may act as a detriment to either the other members of the board of directors, cooperative corporation and other tenant shareholders.”

“In summary, there are more conflicts of interests which mitigate against the superintendent being a member of the board of directors than the benefits of his/her expertise and intimate knowledge of the building systems, maintenance repairs and capital improvements.”

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