You may have longed to be on the board of directors for your homeowner association, or were pressed into serving. Either way, you are now a board director and must make vital decisions for your community. Few board members receive any education from their management company before serving and there is no state requirement for required education as there is in Florida. Since we manage over 230 associations and assist over 700 board members, we have learned the “soft” skills to be an effective director. You can also choose to learn the “hard” skills such as reading the Davis-Stirling statues, reviewing “Robert’s Rules” and take the time to become well versed in corporate law; but this is not necessary. There are just a few traits you need to do your job well and lead your community.
Be Prepared
By law, your management company will post the agenda for your next meeting no later than 4 days before that meeting. Our policy is 5 days before, so board members can make changes to that agenda, such as adding a discussion point. Typically, the board packets are delivered on or before this date by the management company to each board member (this can be electronically or by hard copy). Don’t wait until the actual meeting to review this documentation. Review the board package so you can seek clarification from the Community Manager prior to the meeting, or have questions ready at the meeting. Reviewing the material while the meeting is underway is bad form. Be prepared for the meeting by having reviewed your board package prior to the meeting.
Trust (but Verify)
You may personally like your Community Manager and trust the actions they are taking. Even so, it is your responsibility to check their activities. You want to give them the room to do their job and not micro-manage them, but you should not allow them to run your community. You may rely on their expertise and intimate knowledge of the state laws, but you ultimately are responsible for the decisions you are making. They may secure the three bids for a new landscaper, but it should be the job of the board to choose the best option and not be “steered” by the manager. Don’t accept the financials blindly, review them and ask questions if anything is awry.
Knowledgeable
You may not need to know the granular details of Davis-Stirling, or have the knowledge of an association attorney, but you should have general knowledge of finances, how to conduct yourself in a board meeting, and your fiduciary responsibilities. You have a important corporate responsibility to protect the assets of your corporation. For you, your corporation is the association, and the assets are the common areas. You must have funds on hand to pay for current expenses and anticipate future repairs and replacements of the common area assets.
You have four core duties to the corporation:
- Duty of Care:
Acting in good faith, exercising reasonable care, diligence, and skill, and being informed and active in decision-making.
- Duty of Loyalty:
Prioritizing the organization’s interests above personal, professional, or financial interests, including disclosing conflicts of interest.
- Duty of Obedience:
Ensuring the organization complies with applicable laws, regulations, and its own bylaws, while upholding its mission and charitable purpose.
- Strategic Oversight (and Financial Stewardship):
Guiding the organization’s mission and long-term direction, approving budgets, and monitoring financial health and operational performance. Your directors and officers insurance will protect you from frivolous lawsuits, but it may not protect you from willful negligence.
Engaged
It is easy to let other board members “drive the bus” and you just fill the seat. You are there to represent the owners and participate in the decision making of the board. You bring a unique perspective to the board and you need to share that expertise and experience with the board. No board member has more than one vote, so your vote matters as much as anyone else. Although it may be intimidating to debate issues in front of others, and some board members may be more vocal than others, your vote matters. You have the right, even the obligation, to questions other board members on their thought process, and present alternative thinking. You should be inquisitive and ask questions of other board members, vendors and your management company.
Confident
It can be daunting to be bullied by homeowners or stressful to have conflict with other board member. By law, any owner or member may criticize you personally for the decisions you are making. That is considered freedom of speech, and even if disparaging towards you, protected by law. Other board members may behave “badly” if they are voted down and rather than understanding and following the “duty of loyalty”, they may try to undermine you. Boards have been recalled for the decisions they have made and many communities go at war with each other. You must feel confident in your decision making and not take anything said about you personally. At all times, in all situations, you should be trying to make the best decision you can for your association with the information you have at hand. You are trying to make a decision a similar, reasonable person would make, and show Good Business Judgement, which protects you from personal lawsuits. As a board member, always strive to obtain the best information you can, and whenever in doubt, consult your HOA attorney.
There you have it, five traits that will make you an effective and fearless board member. The job of a board director is a noble one: you are protecting the assets of your association and trying to increase or maintain the values of the homeowners as well as creating a vital community. You may not receive compensation and you may receive scorn when dues must be increased or assessments must be levied, but you are fulfilling your critical role as a community leader.
