board of directors
See also Index, standard for board/director/ARC decisions.
A Utah nonprofit corporation must have a board of directors. The board is the unit ultimately responsible for managing the business and affairs of the corporation (the association).
A board is required to consist of at least three individuals.
The only requirements Utah law places on those who may be elected as directors is that a director must be a natural person and at least 18 years old. While a corporation's articles of incorporation or bylaws may prescribe further qualifications that a director must meet, further qualifications are not required. Utah law does not require that a director be a resident of the state of Utah or a member of the corporation.fn1 See Utah Code § 16-6a-802.
A board acts in all instances on behalf of the association, unless the governing documents or the law authorize some other person or the members to act in a specific instance on behalf of the association. Thus, all corporate powers are exercised by, or under the authority of, and the business and affairs of the association managed under the direction of, the board (except as limited by a governing document or law). See Utah Code §§ 16-6a-801, 57-8a-501, and 57-8-59. A member of an association has no right relating to the management, control or purpose of the nonprofit corporation, except as provided by the governing documents or law. See Utah Code § 16-6a-611(a). The two primary rights an association member has relating to the management or control of the association is to vote to elect board members and to amend the CC&Rs or bylaws.
Actions must be approved by a majority of directors present at a board meeting where a quorum is present, unless otherwise provided in the governing documents. See Utah Code § 16-6a-816. Utah law defines a quorum as a majority of directors in office immediately before the meeting begins, unless a greater number or lower number is set forth in the governing documents. See id.
As defined by Utah law, directors have basic legal obligations or duties that arise from their ultimate responsibility for the business and interests of the association. The duties establish both the general standards of conduct for a director to follow and also the reviewing standards for a court to use in determining whether a director's actions have been proper in a particular circumstance. The primary duties imposed by Utah law are the duty of good faith, the duty of care, and the duty of loyalty. See Utah Code § 16-6a-822(2).
For condominium associations, see also Index, management committee. A management committee is the board of directors in condo associations for purposes of the Nonprofit Act.
FN 1. However, Utah Code § 57-8a-502, titled "Period of administrative control," states in subsection (3)(a), "Upon termination of the period of administrative control, the lot owners shall elect a board consisting of an odd number of at least three members, a majority of whom shall be lot owners." The intent of this section appears to be that subsection (3)(a) only applies to the turnover meeting where the declarant turns over control of the association to the lot owners.
(For reference: 57-8 is the Condo Act, 57-8a is the Community Association Act, 16-6a is the Nonprofit Act)