Fiduciary Duty - Board members are bound under state law - usually a general nonprofit corporation or a specific condominium/community association statute--to act within their authority, to exercise due care and to act in good faith, taking into account the association's best interest. Under the fiduciary model, board members do not have individual power or authority. Rather, decision-making ability rests with the full board.
The law imposes fiduciary responsibilities to ensure that power is exercised conscientiously. Thus, the fiduciary standard demands that board members possess good communication skills, plan carefully in advance, delegate work to qualified committees or advisers, exercise initiative and independent thinking, work well together, and always act in the best interest of the community as a whole.
Preparing for a Community Association Meeting - Volunteers demonstrate their leadership in community association meetings.
- Inadequate preparation might result in ineffective or illegal meetings. Failure to conform to meeting requirements as stated in statutes and governing documents may result in invalid decisions and votes.
- Poorly-managed public meetings hurt the credibility of the board, the association, and the manager.
- Poorly-managed meetings discourage current and potential volunteers.
- Difficult meetings discourage and burn out managers.
In order to prepare for meetings you need to know four types of community association meetings:
The Bylaws typically outline the preparation steps for different types of community association meetings and what meeting requirements a community association must fulfill.
Parliamentary Procedure - Some meetings run so smoothly that they are boring, while others are doomed from the outset to be a donnybrook between opposing factions. On balance, most people would prefer the boredom over the stress, although nothing enlivens a community and ensures a quorum better than a brewing controversy.
The chair must maintain control, whether the meeting is quiet or chaotic. There are times, of course, when no amount of planning, foresight, and strength of personality on the part of the char will avert disaster. Nonetheless, all of these elements can affect the meeting. Conversely, the lack of these elements will almost always result in a meeting that is out of control.
Most association documents require the board to use parliamentary procedure at annual and special meetings. Though the structure of parliamentary procedure often aids a meeting, it isn't necessary for association meetings to be as formal as the House of Lords. As with many good things, parliamentary procedure can be overdone. Here is a link to some ABCs of parliamentary procedure.
Prepare Minutes for a Board Meeting - The minutes should reflect all matters brought before the board, whether adopted, dismissed without discussion or vote, rejected, deferred, tabled, or simply presented as information.
Much of the discussion at a meeting will not be pertinent to decisions and will not need to be part of the record. The only items that need to be written down word-for-word are motions (actions) and resolutions.
Much of the wording for the minutes will be the same for each meeting. Once this wording is established and approved by an attorney, the association secretary can use it for every set of minutes.
Meeting minutes stand as a record which can be reviewed by members, officers, board members, and outside parties to determine the official acts that have, or have not, been taken by elected representatives of the association. Once approved, the minutes should be signed and dated by the presiding officer and the secretary. Once approved, the minutes should be placed in the minute book in front of the agenda and committee reports for that meeting. An experienced association attorney can quickly review a set of minutes and determine if there are issues of legal significance.
Prepare an Action Item List - A list of actions to be accomplished as a result of discussion or decisions at a meeting. This is a supplement to the official minutes and serves as:
- A means of documenting assigned tasks
- To remind people of their assignments
- To track completion of activities
- As an outline for developing the management report
- As a means of reminding boards to make use of committees
- As a means to justify why something was not done or why management cannot respond to informal assignments from individual board members
Calendar of Events and a Management Plan - A calendar if significant events and dates is the foundation for an effective planning process and efficient operations. It serves as a tickler file or planner and is a deterrent to crisis management. It should be accurate, comprehensive, an easy to read.
Additionally developing a management plan is important to serve as a list of the annual cycle of managerial tasks to be performed each month for the purpose of operating the community association as efficiently and effectively as possible.
Managing Committees - Some committees are mandated for a community association such as elections, nominations, and architectural committees. (See the community association's applicable state statutes and governing documents.) Other standing committees can be useful as well.
Additionally special (ad hoc) committees are established as needed to accomplish a particular task and dissolved after the task is completed. The benefits of special (or ad hoc) committees include:
- Used to collect information, develop recommendations, or perform tasks related to one-time issues--as opposed to ongoing needs
- Opportunity to participate for those residents unable to commit to ongoing committee assignments
- Opportunity for a board to assign special tasks to an entity other than management
- Provide a sense of accomplishment and closure for members
- Reduce chances of a committee taking on a life of its own or gradually assuming a role or power beyond original intent
Strategies for Resolving Problem Situations - As American society becomes more litigious, the individuals who govern and manage community associations face increased risk of personal liability for improperly performing their duties. While attorneys and accountants have professional code of ethics that govern their conduct, few state or private regulations exist to help directors and managers of community associations perform their duties properly.
- A conflict of interest is a situation in which an individual's duty to one leads to the disregard of a duty to another.
- An association's manager owes a fiduciary duty to the association that includes a duty of care, loyalty, and honesty.
- Managers owe a duty of confidentiality to the associations that they represent. The duty of confidentiality continues after the client relationship has ended.
- Managers should not generally accept gifts or other favors from vendors who provide supplies to their clients.
- Members of the association's board owe the association the same duty of loyalty, care, and confidentiality as the manager. Board members may be held personally liable for the violation of these duties.
- Boards must enforce the association's covenants and rules and regulations consistently. Board members should never make exceptions for other board members or for friends.
Reviewing Mission Statements - A mission statement is a short statement that describes the purpose for your association's existence. Its function is to guide you and your staff in making critical and strategic decisions that affect the direction of your association. It is short and memorable, coherent and concise, broad and continuing, and distinctive.
Develop Short and Long Range Goals - Short term goals can be achieved in the near future within a few months, a year, or within 3 years. Long term goals can be achieved over a long period of time such as 3-5 years or more.
Develop a Strategic Plan - The purpose of strategic planning is to set your overall goals for you association and to develop a plan to achieve them.
Key Steps in Developing a Strategic Plan:
- Conduct an analysis. Analysis should include strengths, weaknesses, opportunities and threats (SWOT).
- Develop a mission statement. The mission statement describes your association's purpose.
- Develop the goals. The goals will enable you to achieve your mission.
- Develop the objectives. The objectives are the actions that need to take place to achieve your goals.
- Develop an action plan. Create an action plan for each objective.
- Implement the plan. Do what you have planned.
- Monitor and evaluate. Check your progress regularly. Reviewing your plan regularly is necessary to improve the plan and ensure its execution.