Serving as a director can be a daunting task considering all the responsibilities involved in governing a condo corporation’s affairs, which can include making tough financial decisions. Why do some condo boards excel and others struggle? There may be lessons to glean from the best practices successful boards tend to have in common. Pat Crosscombe, founder and CEO of BoardSpace, answers: What makes a condo board successful?
Experience as a condo board president and conversations with people involved with dozens of other condo boards suggests there are best practices that will help condo boards excel. In no particular order, here is a checklist:
Introduce sound policies
Good governance begins with good policies. Every condo board needs to have policies in place for governance, finances and communication.
Aim for a balance of director expertise
Condo boards don’t get to handpick their directors, but every board can strive for a balance of skills and expertise. For example, it can be helpful to have a director that understands the legal side of things and another with a background in financial management or accounting.
Add officers to bring in needed skill sets
Officers do not vote and are not elected, so there is much more freedom in their selection. Once the board is elected, the directors can appoint officers to fill any gaps in expertise. Being an officer for a year or so is also valuable training before becoming a director. Adding officers lightens the overall work load of the board and when specific skills are needed, their knowledge can be extremely valuable.
Anyone can be on a committee. Many condo boards have created committees for things such as organizing social events, looking after gardens, and writing newsletters. Because committee members don’t have to be official board members, this is also a fantastic way to get new people involved. It’s advisable to include a board member or officer on each committee, to liaise between the board and the committee. If this isn’t possible, consider asking the committee chair to attend board meetings whenever an update is required.
Have written job descriptions for director positions
Current or potential directors may not know what is required of a president or a treasurer. Giving every director a clearly defined role ensures board members understand their respective responsibilities.
Don’t leave positions vacant
Appointing a new director as soon as a position becomes vacant is a good practice. It’s not easy to find a new director, but the sooner a replacement is appointed, the better. There is always a concern that the remaining directors will be overworked (and then also leave the board) because too much is expected of them. Directors are volunteers and are already making a significant time commitment to serve on the board.
Make documents available before being asked
Make all relevant documents available to everyone. Transparency is key.
Keep corporate records organized and accessible
Condo records — such as meeting minutes and financial statements — are crucial to a condo corporation. These records must be organized, up-to-date and easily accessible to everyone who needs them. Directors must remember to start saving corporate records as soon as they join the board — if they wait until they leave the board, it will be too late.
Practice consistent and reasonable rule enforcement
Condos have lots and lots of rules. Enforcing all these rules is not so easy. Rule enforcement requires two key aspects: be consistent and be reasonable. Being consistent means that rules are applied equally to all owners. No one is granted special permission to ignore a rule. Being reasonable means that after an owner is informed of a rule violation, he or she is given a reasonable amount of time to fix the problem before the board takes the next step.
Commit to proactive maintenance
It pays to be proactive. Maintaining building systems proactively identifies small problems before they become giant disasters. Conducting annual inspections of major building systems costs money in the short term but pays off in the long run.
Take, for example, the board of high-rise tower that replaces all the unit furnace filters on an annual basis. Replacing filters improves furnace efficiency and prevents damage to more expensive parts.
Overall, condo boards should strive for balance, proactivity, and transparency. Having the proper balance of skills and understanding ensures that the board is knowledgeable and able to get the job done. Proactivity and transparency keep minor issues from becoming more significant. By following this checklist, every condo board can be successful.