Codes of conduct

What a code of conduct is, and is not

State law already requires directors to act in good faith and put the association's interests first. That is fiduciary duty, and it comes from your state's nonprofit corporation code, not from anything your board writes down. A code of conduct sits one level below: board adopted policy that spells out what "good faith" looks like in specific, everyday situations.

Many associations build their code from the Community Associations Institute's Model Code of Ethics for Community Association Board Members, a trade body document, not law, that a board can adopt in whole or in part. Adopting one does not add new statutory rights or duties; it commits your specific board to a specific, written standard you can be held to.

What a typical code covers

Most codes built on the CAI model cover four recurring themes. Disclosure means naming, before a vote, any personal or professional relationship you have with a company or person seeking business with the association (see Disclosing conflicts). Impartiality means performing board duties without favoring one owner or group of owners over another (see Avoiding favoritism). Confidentiality and gifts are usually spelled out in the code's own words:

"Keep confidential any owner, resident, or other third-party discussions, decisions, and comments made at any meeting of the board properly closed or held in executive session unless specifically authorized by the board."

Source: Model Code of Ethics for Community Association Board Members, Community Associations Institute

"Decline gifts directly or indirectly from owners, residents, contractors, or suppliers."

Source: Model Code of Ethics for Community Association Board Members, Community Associations Institute

Why it's enforceable, and where it stops

A code of conduct binds your board because your board adopted it, either directly or by writing it into policy, not because a statute demands its exact wording. That also means it cannot create legal cover that does not exist elsewhere: adopting a code does not grant immunity, and it cannot excuse a board from a statute that says more.

Whether declining a vendor gift is just a policy violation or a crime depends on your state. Florida has gone further than a voluntary code: accepting a kickback from a vendor is a felony there, and a director who profits personally from board service can be removed from office by statute. Most other states leave both of those where the rest of the code lives, as a standard the board set for itself, not a criminal one. Check your own state's law and your board's adopted policy before assuming which one you are under.