Published in the ECHO Journal, August 2007
Many excellent and learned treatises are available on how to be a good board member and more specifically a good and effective president of the board of directors of a common interest development (CID). This is not one of them. What follows is a more or less random series of idiosyncratic reflections on my experience of serving as the president of the board of directors of a medium size CID (160 units), in this case a market-rate stock cooperative, a non-profit California corporation, which lends a certain taste to the buffet offerings. I should add the caveat that the only credentials I have is that I’ve been through the experience.
Reflections From A Board President
Power
The office of board president is unique, in reference to the other officers, in that, while democratically elected, the president becomes the CEO of the CID corporation and most of the day-to-day power necessarily flows through him or her. In the board room the situation is somewhat more balanced with the president presiding more as “first among equals”—influential, of course, but still only one vote. In CIDs not operating as corporations the president’s role will be to function more as liaison to management but most of this discussion will apply.
As an ideal, never fully realized, the president must be comfortable in wielding the necessary power delegated to him or her but not be captivated by it. I came to the conclusion I needed to be very careful and sparing in the use of raw power—most of the time it only feeds the ego.
Steady as She Goes
This, of course, is a nautical term and the imagery of the board president as captain of the CID ship is very apt. It quickly becomes obvious that not everyone is qualified to be captain (or president). That’s not elitism; that’s reality and is not to be puffed up about, but one should have confidence in one’s ability to steer the CID ship. On the other side of the coin one also needs a dash of reality and humility in the recognition that, in my case, I couldn’t do it alone. I needed plenty of help. Steadiness and the refusal to panic and run off in all directions is an important quality to have and/or develop. The board and the membership will be reassured to see you unflappable at the helm. The caveat here, of course, is that you must be flexible in changing course if you find yourself steaming in the wrong direction! Using this same metaphor, run a tight ship. People, the ones you never hear from, respect that.
Process and Protocol
There is one operational parameter that I violated more consistently than any other—not following the Rule of Process. It’s a noisy world and it is easy to get distracted by the cacophony of voices into committing that cardinal sin of boards’ of directors—micromanaging. It is important to realize that governing is a process, not a series of random events, and that the function of the board is to set policy. While one can’t plan in advance for everything, a good grasp of the process through which you hope to achieve a result will allow necessary adjustments to be made gracefully without everything else disintegrating.
While protocol may get under the skin of the free spirits, as well as frustrating your enemies, it is the glue that binds process steps together in an orderly and rational fashion. Protocol allows time and a proper space for emotionalism to run its course so that process is not disrupted or, if a valid point is made, adjustments can be duly made. This leads us into the area of board decisions and the role of the president in facilitating that crucial process.
Board Decision Making
This is the most important function of a board. It is what it was elected to do and so a president, as presider, must guide this process carefully and rigorously. Some of the important elements are:
- Strict set-up and protocol in running meetings according to parliamentary procedures.
- Require written, factual information on proposed actions by the board in advance. Require board members to come to the meeting prepared to vote. Board meetings are not debating forums. More gets done and fewer meetings are necessary.
Agendas
Use of agendas is a crucial skill to appreciate and learn because it is the single most important tool a president has to prioritize the matters that need to come before the board as well as being the means to keep the meeting flowing and on target. As one president, referring to board meetings, has commented, “I don’t like surprises!” And I certainly agree with that. My policy was that it needed two board members to override my decision to not have a certain matter on the agenda. It seldom happened. A good, realistic agenda allows you to limit the matters at hand to what can be accomplished in a reasonable time of about 2 hours. People get tired and cranky after that. A president who permits board meetings to run to midnight, not an uncommon occurrence with our previous boards, has not got his or her meeting under control and little that is constructive can come forth from such marathons.
Gatekeeping
Agendas are a specific example of the larger role of the president as gatekeeper. The amount of “stuff” that comes to any reasonable sized complex is staggering, and it will quickly paralyze a board if it is just dumped in their lap for quick decisions. Therefore, the president, as chief operating officer must weed through the pile and decide which are necessary to bring before the board and when. This also applies to matters, such as pet projects, that individual board members might want to bring up. Another factor is that many items must be handled more expeditiously than is possible with a monthly board meeting, and the president must be empowered to make those decisions, with appropriate expert advice and within parameters set by board policy.
Communications
Several aspects are relevant here. First of all is the obvious need and responsibility to keep the other board members and management properly informed about what is going on. The same applies to communicating with the members of the community. Some guidelines are worth repeating here:
- Keep it simple, easy to understand. Reduce complexity but tell the truth.
- Don’t frighten. Lay out consequences but also options.
- Introduce change carefully, explaining every step along the way to get maximum buy-in.
What I also want to stress here is the role of the president as the chief conduit to management. It is very important that management get its marching orders clearly from this authoritative source.
Under this heading comes another cardinal sin I often committed—trying to do it all by myself. Isn’t it easier and more reliable that way? Well, no, it is not. First of all is the danger of cynicism and burnout. I would say that the absolute maximum length of consecutive service as president on a CID board is two terms of about 3 years each.. Then, hang it up, resisting the temptation to think you are indispensable!
Second, other directors were also elected, and they must pull their fair share. So put them to work! They need to develop as effective board members and one must always keep in mind finding a possible successor.
Third, Section 7231 of the California State Corporations Code mandates, under what is often termed the Business Judgment Rule, that “a director may serve, in good faith, in a manner such director believes to be in the best interests of the corporation and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. Under these conditions, the person serving as director shall have no liability resulting from errors caused by faulty information or judgments”.
Last, it is essential in these days of ever increasing complexity to hire a (preferably) full-service management firm that has a good track record. A board is not capable nor do they have the time as volunteers to handle the accounting, keep up on new laws, administer maintenance and project management In addition, board personnel change every year with the election of new people to the board. In order to smooth the effects of these periodic changes so that the ship remains steady, an association management firm is hired. Community association management is an art form, and a good one is worth its weight in gold. So, listening to the penny-pinchers who object to paying for sufficient management is not a good idea.
Rogue Directors
I hesitate to bring up this sensitive subject, but in these days of general apathy towards board service, which reflects a larger cultural malaise, few people run for election to the board. This limits choice, which is at the heart of the democratic process, and increases the odds that persons who have only their own agenda in mind will be elected, often because there is nobody else running. They cannot stop a president, but they can make his or her life miserable by their hubris. Their trademark is a general refusal to work cooperatively in the give and take of board functioning and thus becoming “loose cannons.” This part of the buffet is distasteful and a full treatment cannot be offered here but, practically, what can you do to ameliorate, if not solve, this situation? The candid answer is “Not much.” They are hard to get rid of. Requiring strict adherence to processes and protocol, ignoring complaints without viable solutions and limiting their exercise of power to the minimum provided by law are some of the measures I would suggest.
Reserves, Reserves, Reserves
If there is anything guaranteed to keep a president awake at night, it’s the lack of sufficient reserve funding to handle a large expense with the resultant necessity to approach the membership with a major assessment. Just the thought of this eventuality should be enough to spur efforts to build up your association’s reserves.
Closing Thoughts
Being president of the board of directors is a multi-faceted job requiring leadership, energy, time and, perhaps most of all, vision. It can’t be done property on an ad-hoc basis. I have offered some characteristics that seemed important to me in doing the job. But lists get tiresome, buffets tempt one to overindulge and it is time to focus on the benefits and rewards of undertaking the task, namely the challenge and stretching required to meet that challenge and, returning to my previous metaphor, the satisfaction in bringing the ship into safe harbor.
Finally, there are always many expectations of a president of the board by others, especially those you were elected to serve. Resist expectations (even your own) and chart your own course, seeking and accepting wise counsel when appropriate. Always take good care of yourself and along the way enjoy the ride!
Garth M. Stanton is past president and currently vice-president of the board of directors of a cooperative in Marin County. The opinions and conclusions expressed in this article are those of the author and do not necessarily reflect the views of the board at his association or its individual members.