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Work underway on Ocean Pines ethics policy

By Josh Davis, Associate Editor

(Nov. 2, 2017) While the Ocean Pines Association does have a conflict-of-interest policy, it has no procedures other than the removal of the offending party.

That was an issue when, prior to the August election, the board considered removing Director Slobodan Trendic from office for allegedly trying to coerce association employees to sign complaints against former interim general manager and Director Brett Hill.

Others, meanwhile, alleged Hill was illegally spying on Ocean Pines employees and had conflicting interests that involved his own technology company, the association attorney, auditor, and a contractor hired for bulkhead work.

Tensions escalated until, near the end of the session, several shouting matches erupted during public meetings and work, effectively, came to a standstill.

A newly formed ethics work group, during its first meeting last Friday, brainstormed on ways to address future complaints before they reach that level. The panel includes directors Dr. Colette Horn, Tom Herrick and Ted Moroney, former directors Tom Terry and Jeff Knepper, and attorney Donna McElroy.

Currently, Resolution B-05, on conflicts of interest, states “no director, officer, employee or committee member shall recommend a course of action or make a decision on behalf of the Association” if they have a financial interest in the matter other than the association. The policy also addresses the release of confidential information and acceptance of “gifts and gratuities.”

The penalty is laid out in one-sentence: “Any Director, officer, employee, or committee member of the Association may be removed from his position for violation of this policy.”

Knepper, also an attorney, was quick to add a note of caution during the proceedings.

“If this is an activity that most of the board supports and wants to do … this can be very successful,” he said. “If most of the board doesn’t believe that, then this will be a waste of time. You have to want to do this stuff because you believe that it adds value to what you’re doing to your association and yourself.”

Horn said the current governing documents provide little guidance.

“If this is going to come up again, we need some kind of standards that we can agree upon, as a board and perhaps as a community, that we can use to measure board conduct against … before it gets to the [level of] talking about removal,” she said.

The panel favored drafting a policy for board members that could be refined over a period of perhaps several years. If the policy appears to be working, it could then be applied to association employees and committee members.

Knepper noted the distinction.

“The employee problem is handled by the HR [human resources] department. It is an internal matter, it is a personnel matter, and it should be done in confidence and not on the public stage of the association,” he said. “The board, on the other hand, is a different animal.”

With director-member conflicts, Knepper said, the association should hire an independent law firm – one not currently or formerly employed by Ocean Pines – to investigate.

“Give the law firm the task of investigating, coming to a conclusion and then making a specific recommendation back to the board as to what they found,” he said. “The next step is the board is instructed to honor the recommendation, unless you know specifically why not.”

He added the law firm should handle procedures for action.

“They have it or they’ll make it – we don’t have to develop them. The allegation of bias in the procedures is gone, because we don’t develop them,” he said. “And we get out of the detail [and] procedures business, and the reason I would strongly suggest we do that is because I think the swamp is of monumental size in detailing the procedures.

“I would argue we don’t really have that skill and … we shouldn’t be doing it. We can hire professionals,” Knepper added.

Horn agreed.

“Having an objective third party doing the investigation takes any personal feelings out of it, any personal bias out of it, and amateurism out of it,” she said.

McElroy suggested candidates sign the policy when applying to run for the board. The group also discussed forming a separate, three-person ethics committee to determine when a complaint would reach the level to be sent to a law firm for investigation.

If the policy works, Knepper said, it should be elevated from a resolution to being part of the bylaws. Any four board members can change a resolution “any time they feel like it,” but it takes the approval of members during a referendum to change a bylaw, he argued.

“The ultimate goal, after this gets worked out for a couple of years and gets kind of streamlined, is to move it into the bylaws,” Knepper said. “I wouldn’t want to move into the bylaws until we run it around the block for a couple of years.”

“I just hope we never have to use it, but I think something needs to be in place,” Herrick added.

Horn said the next step is to use several existing policies as a blueprint for a better ethics policy.

The ethics work group will meet again on Dec. 1 at 1 p.m. at a location to be determined.