Working in groups can be a challenge. Working in groups when people’s homes—and possibly their life savings—are involved can be a far greater challenge. It’s one faced every day by those brave souls who volunteer to serve on their co-op or condo board. While there is no sure-fire recipe for building a board that is 100 percent successful day in and day out, there are definitely traits and tactics that the most well-run and effective boards share.
Don’t Get Personal
One of the biggest components to success is ensuring that those individuals who are elected to the board do not come to their new duties with personal agendas in hand, says Angela Falzone, co-founder of Chicago-based Association Advocates, Inc., a management consulting firm. “Board members cannot have personal agendas,” she says. “So many people want to get on the board because they don’t want any more assessments” or they have some other personal goal. “That’s the worst reason to get on a board.”
They need to keep in mind from day one, she says, “that they represent the owners and the building and have to make decisions on their behalf.” Falzone adds that often the best board members are the ones who prioritize “fair thinking” and who remember to put the needs of the building community as a whole above their own preferences.
Problems can arise when board members have issues with not getting their own way, says Falzone, adding that if you are a member of a five-person board and three people vote opposite of you, “You just have to accept it.” The alternative is a board without trust and mutual respect—which is to say, a board that is dysfunctional and potentially headed for disaster.
Tim Manning, a realtor and long-time board member of a 95-unit loft conversion in Bucktown, suggests that having a broad range of talents and experiences among board members also can contribute to the board's effectiveness. “Having a diverse professional background for the board is crucial,” he says. “We are fortunate enough to have an architect, a senior financial manager, an investment director, and a homemaker—and I’m a residential real estate broker. This allows us to utilize our expertise to make decisions based on occupational experience.”
Why It's Important
For most owners and shareholders, the dynamic of their board is not something they give too much time or thought to, unless a problem arises or rumors of dissent begin circulating. The way a board gets along and functions, though, can be a key component in the health and well-being of the building or community.
“In every facet of business and life, people take their lead from the actions of those in charge,” says Patrick Kennelly, CEO of Phoenix Rising Management Group, Ltd., based in Chicago. “So the board dynamic has a tremendous effect on the HOA at large.”
The board’s level of professionalism is another vitally important factor to the success of the building. “They need sound business judgment,” says Falzone. “They can’t walk into a meeting and say ‘My nephew is a great landscaper, let’s hire him.’ They need to understand and go through the proper processes.”
And they need to understand the basis of those processes. “They need to understand that it is all regulated by law,” Falzone says. “You don’t get to make up the rules.” In the past, Falzone says she has seen a great number of boards doing things and making decisions that did not comply with their organization’s declaration or bylaws. They were not doing these things out of malice, but rather a lack of knowledge. Board members, Falzone says, “have to do their homework.”
Finding the Right Path
For boards, there are certain traits to aspire to, the characteristics that will – regardless of the situation—be far more likely to garner good results than bad. “The traits that characterize a good board include dedication, integrity, transparency, fairness and assertiveness,” says Kennelly.
These types of boards also look out for each other and create an environment of support that allows for thoughtful decision-making and innovative approaches to problem solving. “Great leaders ensure that the credit for success is spread to as many as possible and take personal responsibility for any failures,” says Kennelly. “This type of board dynamic will create the most harmonious environment.”
He adds that magnanimity can be a key component in helping a good board become great. “No different than at the national level, no one wants to see their leaders blaming the previous administration or making excuses why things are not getting done,” Kennelly says. “Take ownership and move forward. Spread the fame, take the blame and people will follow you.”
The most successful boards also find a way to steer clear of common problems, including becoming too comfortable or casual about their roles. “Good boards,” says Kennelly, “avoid the pitfall of apathy by defining exactly what they want to accomplish in the coming year, tying the tasks to the budget for funding, communicating as much to the ownership and then actively working with management to drive the process until completion.”
That ability to work well with management is another key component of success. “A poor dynamic between the board and the manager will guarantee failure,” says Kennelly. “If the board is uncivil with management, the ownership will follow suit. Who could succeed in such an environment? To achieve real success, it is critical that the board work with management in a unified front.”
Part of building that good working relationship involves clear, ongoing and respectful communication. The same is true for the board’s involvement with their peers and fellow owners or shareholders. “Communication with owners is very important,” says Falzone. She encourages an avoidance of the “we/they” way of looking at things, and underscores the importance of open dialogue and transparency. “You can’t meet behind closed doors,” she says. “You have to give owners a chance to be there.” She suggests at least four open board meetings a year.
Being responsive to the needs of the building or community also is imperative, says Manning. “Our property management company always commends us on our quick response time. By communicating via email, we are able to efficiently discuss resolutions and promptly make a decision.”
This responsiveness may include anticipating needs before they arise. “Every month, our property manager and I walk through the entire 95-unit building writing a punch list of issues we see,” Manning says. “This helps us find out exactly what concerns need to be addressed and how best we can remedy them. Together, we’re able to communicate this to our custodian, the management team, our board and most importantly, our residents.”
Making it Better
What if a board is facing some difficulties and realizes that the way they work is not working well? There is hope. To help board members become more efficient and effective leaders, there are consultants like Falzone and her firm that can help a leadership team get back on track. She will conduct a full review of the HOA or co-op, and will examine the declaration, bylaws, minutes, budget and any other documents that will help tell the story of the building or community. Then, after a three or four week analysis, she can come back to the board and “tell them what they’re doing, what they must do and how to get better.”
Also, for buildings that self-manage, she can provide guidance on building processes that will make the board function more smoothly and with less pain on the part of everyone involved. Adhering to those processes can become second nature for the board, allowing them to move on to tackling bigger and more involved issues in the long-term.
Board members also can turn to each other for help. “If a board finds itself off track, the best vehicle to stability is to pause, sit down and develop a shared vision and set of goals,” Kennelly says. Also keep in touch with the owners and be accountable, he adds. “Getting focused and working towards a common goal can help refresh a tired board or motivate a new board that perhaps feels overwhelmed by the magnitude of their charge.”
Both Falzone and Kennelly also encourage self-directed learning by board members. “There are a number of books, magazines and articles available through The Cooperator,the Community Associations Institute (CAI), the Institute of Real Estate Management (IREM) and other industry sources” that can help, Kennelly says.
Striving to Improve
No matter what the circumstance, boards can improve on their own performance and, in turn, improve the performance and functioning of their condo, HOA or co-op, making things better not only for themselves but for their friends and neighbors as well.
But it does take a lot of work and a willingness to admit when things perhaps are not going as well as they could. “A newbie board member doesn’t know what they don’t know,” says Falzone. It takes time to get up to speed, to ask questions and learn. And that’s something that most dedicated volunteer board members are willing to do.
With effort, training, education, commitment and good relationships with management, owners and shareholders, a board can make its own very heavy burden lighter and turn the experience of leading their community into a rewarding one, both for themselves and those they serve. And soon, a good board will be on its way to becoming a great board.
Liz Lent is a freelance writer and a frequent contributor to The Chicagoland Cooperator.