Problems with boards

Dana,

As long as you have this list started, how about creating one with the good things that Boards do. (Total new concept)

Dana,
Dat be the truth--funny yes. I look at life with my glass half full. Some, people always are half empty. Sometimes before they are in their second sentence, I know how empty they are.

I believe that problems with Boards are rooted in a several areas including; the nature of a volunteer not-for profit Board, motivation for becoming a Board member, and most importantly their qualifications and skill sets.

Many association board members are not professionals. They may not have formal education or practical experiences to properly lead and manage a company – and their association is a company. Typically, for-profit Board members who are paid, have to compete on the open market with other candidates to get the job. That usually provides for a stronger pool of qualified candidates. Board members for these companies are usually the most senior and qualified that are available. You would never select a board member because s/he was the only one available who wanted the job or use it as an entry level position.

With associations, the candidate pool can be weak and lacking. Reasons for running for a Board position may include:
- No one else will volunteer to do it.
- I want to protect my personal interests.
- I want to help and give back.
- I have a personal agenda.
- I want to be “In the Know”.
- I can achieve a sense of self-satisfaction.
- I can build my resume.
- I can form valuable relationships.
- I want to acquire status or power.

Unfortunately, this is not what is needed to run a company. Many of the problems faced by associations are not unique to them. The same problems exist in all companies. Some leaders handle these issues well and some don’t. It is only reasonable to expect that an association with inexperienced leaders will face a very rocky road. This is a formula for a company destined to “trial and error” approaches and one that spends all of its time on fixing problems, rather than from preventing them from occurring in the first place. The use of a Management Company is no guarantee of success either, as many of them and under-qualified and under-experienced in leading a company. They can be good at routine back-office jobs (accounting, web sites, maintenance requests, etc.) and enforcers (CCR compliance, fee collection, etc.), but they are not company Board leaders.

George is correct with his comment about associations being created by developers for purposes of maximizing their profits. They also are likely not experts in the field of leadership/management and can easily walk away once the project has been completed. So, now you have a situation where a volunteer Board is thrust into running a company. They enter a system where no qualifications or experiences are necessarily required. Many will not know what to do, why to do it, or when to do it. It is not surprising that they will have problems with their “investors” – namely, the owners.

The options for an inexperienced Board are few. They could hire a qualified Management Company to assist them. They could try to recruit more qualified volunteer Board members. But, probably, one of the most important things they can do is to arm themselves with knowledge. It may not be pretty, but a Board may have to quickly climb the learning acceleration curve by making mistakes and learning from them.

From my experience, I have found that many of these mistakes can be avoided by paying attention to and setting up the proper management control infrastructure. The Board must understand how decisions will be made, who is to lead and who is to follow, the procedures to be used, the authority levels of BoD members, the communication system, and a host of other things that should be considered in the performance of their work. There are multitudes of opinions on the best way to manage a business and there is no loss for management consultants or books that have been written on this subject. I believe that the following are some of the key components that must be addressed and strengthened for an association to prevent problems from developing:
- Clear BoD roles & responsibilities
- Establishment of several key business processes (budget preparation, architectural variance, fee collection, BoD request for decision, CCR enforcement, emergency contact, maintenance request, and communication)
- Use of decision packages to facilitate BoD decision making
- A mechanism to quickly gain input and communicate decisions made to association members

Besides these “hard” qualifications, there are “soft” ones that needed for an effective Board leader. Leadership skills of providing direction, influencing others, stepping forward to address difficult issues. Interpersonal skills of relating to people, able to give and take, and manage disagreements. Finally, communication skills of speaks effectively, running effective meetings and preparing written communications.

This is not an easy issue to solve and associations probably have more than their unfair share of problems. But, in the end, it comes down to “what is the best way to manage my company and how can I get the best people to run it?”

good luck
JoeK

Joe, your post went up the same time as me so I wanted to give you a round of applause also.

Of course reading at the bottom of your post I now realize you're a professional at this, not that I'm knocking that. You have offered insight that I have yet mastered.

A big problem I have as a President is motivating my board to tackle assignments. I ask for volunteers but I end up doing most things myself. A brand new board of 9 months (we ousted the old board) and the honeymoon is over baby.

I'd rather have a board of 3 willing to roll up their sleeves than a board of 7 with only 2 doing the work. I feel that during any one board's term you have a couple workers and the rest show up. That is a major reason that the few good members of past don't want to reup, they're tired of doing all the work while others just ride the bus.

I hate to keep sounding so negative but it's extremely frustrating as someone giving his heart and soul to his association and left trying to work with others that just dont' get it!

Dana

Dana and George
For 2 years the Maryland House has passed a bill called the "Home Financial Accountability Act" http://mlis.state.md.us/2008rs/billfile/HB0042.htm, which the Maryland Senate has shot down. The bill will be introduced this year again. It would have allowed essential information to be mailed or e-mailed to homeowners upon request. CAI opposes this bill. One has to wonder why. Some Boards are completely open; many are not. It is ridiculous that if a homeowner wants Board Minutes or Financial Statements they must take off work and go to the manager's office to get something that is sent or e-mailed to the Board every month. How can homeowners protect their investment in their homes if they can't get association financial information?
George: Good luck with your legislature but expect to be working for years. There are moneyed interests opposed to true openness in associations.

Oh Donna, when you find that could you also find out if there is similar new law for 718 condos? We were under the impression that all board members had to sign a form stating that we've "read and understand" the documents and state statutes "to the best of our ability". That seems sort of open ended.....everyone will still be able to say, "Well I THOUGHT that's what they meant.....". Plus, not even our management company can even find that "form" that we're all supposed to sign.

Please keep us posted!

Donna, are you back from Oktoberfest up in the mountains?? LOL

I lived in Cincinnati for a couple of years and do not regret being back in NE Florida at all. Today was absolutely georgeous here but so was in Cinci, just a bit cooler. Still have a house there that can't sell. Tennessee has some georgeous sites, so does GA and NC.
I was in Charlotte not long ago but the trees had not changed colors yet.

Having some trouble finding it as it is brand new. Might even be that the Legislature never passed it. I'll keep on looking. Donna