Just like in the Game of Life, a board has to have a plan to succeed. Whether it is taking the quick route by attacking an issue head-on, or taking time to get educated on the issue first, a board has to carefully and strategically plan its course if it has any hope of successfully tackling an issue. As a veteran community association board member, Jack Thew has excellent advice and ideas that can help any board succeed.
The following tips were provided by Mr. Thew after a recent conversation about association life.
Give True Effort. Board members are operating a business. They need to strive for excellence in everything they do. Half an effort will almost certainly yield mediocre results. At the end of the day, the board has to answer to the members about what was done and why it was done. If the board was not doing everything in its power, the answer may not be what you like. Going through the motions will not help you get to a point where you can retire from the board or feel comfortable that you are truly going to win when you get there.
Build A “Sense of Community”. Building a sense of community is easier said than done. The board will have to go out of its way to do this. Today, communities are more ethnically diverse, resident apathy is widespread, social media is a major form of communication and people live very busy lives. Bringing everyone together is a challenge. There has to be an identified need clearly communicated to the members. Strong consideration should be given to budget for this need and perhaps introduce a standing committee to tackle it.
Practice The “Art Of Compromise”. Many board members have business experience and maybe business owners. Associations are run under a pure form of representation (a republican form of government with a little “r”) where board members have fiduciary duties to all unit owners. The association’s business cannot be conducted using a CEO, top-down approach. Every board member has equal voting power. Every board member may, and usually does, have distinct opinions on how a project should be handled or an issue resolved. There must be a full discussion of all ideas and a melding or compromise to get to a final decision. Time consuming, sometimes cumbersome, but this is the proper way to arrive at decisions.
Avoid The Temptation of Micro-Managing. Board members come from diverse backgrounds, including many that are business or science related. Avoid the temptation to take over and become the in-house expert. In retrospect, it may be better to focus on leading a discussion of your fellow board members to reach a particular conclusion on their own. Also few things will exasperate and anger a property manager than board members micro-managing the association affairs. It is far better to step back and oversee the management of the association.
Develop Specifications For Projects. The vendor selection process does not need to start from scratch each year. Boards should spend time setting specifications detailing all aspects of a project, whether it is big or small. Professionals can help develop the specifications. Once developed, they should be kept with the Association’s records for use in the future. The specifications should be reviewed and, if necessary, updated annually. If done right the first time, changes should be minor. These specifications can be used to get apples-to-apples bids from vendors. While a property manager may play a significant role in developing and maintaining the specifications, the board should maintain oversight on them.
Adequately Vet Vendors. A board needs to vet vendors. The board needs to find out what the vendors are all about. What is the vendor’s business philosophy? How does the vendor handle complaints and unexpected problems? Knowing the answers to these questions is vital because no matter how carefully the board plans and implements a project, something may go wrong. If it does, how will the issue be resolved? Is there room for compromise among the parties? Likely, the board has intentions of being in business with the vendor for some time. Do you want the vendor as one of your business partners? The answer should be ‘yes’, or you should move on.
Develop Institutional Knowledge. Often, when a new member is elected to the board, he or she is greeted with a handshake and a thank-you. Boards should maintain a “Book of Resolutions” for board policy. The resolutions will change over time as the board is confronted with new challenges. Along with the meeting minutes, the resolutions can provide excellent historical information about the association. The Book of Resolutions should be passed down to future boards.
Address the Causes of Issues and Not Just the Effects. Many physical components in a community association do not function as they were designed or intended. Sometimes the developer took the easy way out, causing issues immediately or many years later. For example, downspouts draining directly on a shrub bed routinely kills the plants. A board could replace the plants, but that’s not the real problem. You have to relocate the drainage, perhaps, underground, before spending any more money on plants. If problems are addressed correctly the first time to avoid recurring issues, an association can reduce its long term operating costs.
Don’t beat the last nickel out of a vendor. Is the vendor reasonably competitive in their pricing? What good is a vendor going broke on your project? Vendors are in business to make money. A vendor that does not make an appropriate profit on your project, is a vendor who is not interested in your project. This is a surefire recipe for trouble. A vendor who bids correctly, wins a project with well-designed accurate specifications and makes money, which is why he is in business. The vendor will be happy and will want to do more business with the association and remain attentive to your issues. This is a win-win situation for all parties.
Understand your fiduciary duties. Associations can handle very large sums of money. Even if it is small, it is everyone’s money. Board members are entrusted to take care of the money using the best business practices and, yes, common sense. Questions should be asked where is the money, when was the last time it was checked on, who has access to it, is it insured, what investment risks is the board taking?
Understand the Association’s Financials. Association financial documents can be difficult to understand as there are a myriad of accounting tools including spreadsheets, tax forms and the like. You do not have to be an accounting genius to be on the board. Ask property management and your accountant if you do not understand something. Never lose sight of the fact that they work for you, and not the other way around.
In summary, according to Mr. Thew, board participation goes beyond volunteering for something. It should be an honor and a privilege to serve one’s community. One person can truly make a difference for an association. Keeping in mind the need to do things for the good of the association will help you successfully move through the Game of Association Life.