July 28, 1986
Opinion No. 86/11
Service as chairmen of the board of a closely held family corporation
This letter is in response to your inquiry of June 27, 1986. You asked the Committee for its opinion concerning the propriety of your continued service as chairman of the board of a closely held family corporation. You informed the Committee that for the past twelve years you have served as a director of the corporation, a wholesale dry goods and floor covering distributor with headquarters located in Richmond, Indiana with satellite warehouses in Indianapolis and Cincinnati. You advised that your great-grandfather began the business in 1877 and that virtually all of the stock in the corporation is owned by descendants of your great-grandfather and those of his partner, and that the are less than thirty-five stockholders. You also pointed out that the corporation does business in the Midwest and in Virginia and North Carolina, but that it does not conduct any business with any individuals, firms or corporations located in Florida.
In its original form, Canon 5C(2) prohibited a judge from serving as an officer, director, manager, advisor or employee of any business. However, in January, 1985, the Supreme Court of Florida amended Canon 5C(2) to read:
(2) Subject to the requirements of subsection (1), a judge in an individual
or corporate capacity may hold and manage investments, including real estate,
and engage in other remunerative activity, but should not serve as an officer,
director, manager, advisor, or employee of any business, except a closely
held family business that does not conflict with subsection (1).
In re Code of Judicial Conduct Amendment to Canon 5C(2) (INVESTMENTS), 463 So.2d 1132 (Fla. 1985).
Canon 5C(1) provides:
(1) A judge should refrain from financial and business dealings that tend to reflect adversely on his impartiality, interfere with the proper performance of his judicial duties, exploit his judicial position, or involve him in frequent transactions with lawyers or persons likely to come before the the court on which her serves.
Assuming the corporation can be construed as a closely held family corporation and in view of the recent amendment to Canon 5C(2), your service as chairman of the board of the corporation does not appear to be prohibited by the Canons of Judicial Conduct. However, the Committee does direct your attention to Judge Overton's dissent in the opinion amending Canon 5C(2) and also to Canon 5C(1) which would prohibit your service as chairman of the board or a director if such service interferes with the proper performance of your judicial duties. You have indicated that you are required to attend board meetings regularly scheduled for three weekends during the year and communicate with the president of the company by telephone on a periodic basis.
The Committee also wishes to qualify its opinion to the extent that should the structure of the corporation change at any time in the future so that it no longer qualifies as a closely held family corporation, you would at such time be required to remove yourself from the board of directors.
This opinion is based upon the information which you have furnished. The committee is expressly charged with rendering advisory opinions interpreting the application of the Code of Judicial Conduct to specific circumstances confronting or affecting a judge or judicial candidate. Its opinions are advisory to the inquiring party, to the Judicial Qualifications Commission and to the judiciary at large. Conduct that is consistent with an advisory opinion issued by the committee may be evidence of good faith on the part of the judge, but the Judicial Qualifications Commission is not bound by the interpretive opinions issued by the committee. Petition of the Committee on Standards of Conduct for Judges 327 So2d 5 (Fla. 1976).
We appreciate your inquiry and trust that the foregoing information will be of some assistance to you.
Very truly yours,
John W. Dell
cc: All Committee Members
Participating members: Judges Blanchard, Booth, Dell, Frank, Goldstein,
Green, Grube Tedder, Turner and Attorney M. Craig Massey
All reference to the inquiring judge is deleted from the copies sent to the following individuals.
Mr. Sid White, Clerk of the Supreme Court of Florida
Linda Yates, Managing Editor, The Florida Bar Journal
Kathleen T. Phillips, Esq., Chairman, Judicial Qualifications Commission.
Hon. Howard T. Markey, Chairman, Ethics Advisory Panel of the Judicial Conference of the United States .
Jeffrey M. Shaman, Esquire, Director, Center for Judicial Conduct Organizations
Ms. Jean Underhill, Librarian, Broward County Law Library
Mr. Robert Wallace, Librarian, Dade County Law Library
Mr. Brian Polley, Librarian, Supreme Court of Florida