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Our current Porter is retiring. The previous board allowed him to purchase a unit at the beginning of this year knowing he would be leaving his position this September.
Since then a new board (me and three others) have been elected. We are in the process of hiring his placement. The son (26 years of age) of one of our cooperators expressed interest in the position by submitting his résumé.
I am writing to you to know whether or not this is an acceptable practice. It was always my thought that this would present a conflict of interest. I find that other board members have mentioned giving him a chance. I would just like to hear experienced thoughts or any laws pertaining to this issue.
Your time and consideration is very much appreciated.
Thank you,
Angela
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Hi Angela.
This is a tough scenario. You want to help out a well-meaning family and a capable young man. However, the issue is conflict of interest. Anytime a shareholder or family member of the shareholder is directly hired by the building, you risk COI or the appearance of such. Also, any infractions against him would now be subjected to additional questioning and scrutiny, both by the family and other shareholders (for different reasons). Finally, now there is the potential for this family to have access to "inside information" which they may not use nefariously but shareholders will always wonder about.
My advice is to not even consider the headache. Talk to your lawyer as well because there may also be a legal argument. Something similar came up for us and our lawyer was strongly opposed so we never even considered it.
Finally, I have a friend who lives in a small building where a family has pretty much taken controlling stake of the coop. It is so corrupt and most of it stems from COI since one family got too much power. They own about 1/4-1/3 of the units and the building staff are family members. No one else has power. This is the worst case scenario but small steps can open this up.
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