January 2023

MANAGEMENT TRENDS Community Board Basics: The Art and Science of Having a Strong and Effective Board

By Chuck Graziano, CPM, PCAM, Wilkin Management Group, Inc.

C ongratulations on your decision to serve on your community association board! Or, if you’re considering an officer role on the board, congrat ulations on your interest in contributing to your community by volunteering! In either case, this article is for you and is intended to review some of the basic elements of having a strong, resilient, and effective board of directors. Did you know? According to the US Bureau of Labor Statistics, about one in four Americans volunteer on some level to serve their community. Community associations provide the closest relationship for prospective volunteers to make an impactful contribution that affects their daily lives, making such service one of the best uses for volunteer time. What generally stops community members from volunteer ing is: 1) their perception of the demands on their already busy schedule, and 2) not being asked (40% of people who volunteer only do so after being asked). Being a board member can be extremely fulfilling and productive or it can be frustrating and confrontational, leading to short tenures, constant board member turnover, and most importantly the stalling of important business mat ters that affect your community. What makes the difference is for board members to maintain the right perspective. The role of a board member is to oversee and direct the operations of a nonprofit business, which is an important distinction since you are making decisions, some of which are difficult, that impact your neighborhood, your home, and your wallet. So, let’s start with the three fundamental duties of a board member: Duty of Care: According to Community Associations Institute (CAI), the board is “…required to discharge their duties in good faith and with that degree of diligence, care and skill that ordinary, prudent persons would exer cise under similar circumstances in like positions.” (See, CAI’s Standards of Care in Community Associations).

Pragmatically, this duty does not require the members of the board to be experts in community association gover nance, but as a board member, you are required to act reasonably, in consideration of the information available to you and in consultation with your professional advisors. In many cases, boards are reluctant to contact their legal counsel for advice, or they fail to give adequate weight to the recommendations of the association’s manager, engi neer, or auditor. These are professionals who are required to be experts in their field and considering their advice is an important way to ensure that you are acting with the “diligence, care, and skill” required. Duty of Loyalty: Perhaps the duty that impacts com munity association boards more frequently than the others is the duty of loyalty. This duty requires that as a board member, your actions must be in the best interests of the community association “…and not in the best interest of an individual board member, member of the community, or a for-profit entity.” (See National Council of Nonprofits, “Board Roles and Responsibilities”). Conflicts of interest are not always overt and intentional acts of disloyalty; a breach of this duty can arise based merely upon a biased view that a board member brings to a vote. A good example of this is when a special assessment is proposed as a means CONT I NU E S ON PAGE 48 “Being a board member can be extremely fulfilling and productive or it can be frustrating and confrontational...”

jacoblund/iStock/Getty Images Plus

46

J A N U A R Y 2 0 2 3