CONDOCENTRIC: Six Common Approaches of Successful and Effective Boards

As a lawyer, coach and board member, I know many boards that are brilliantly successful. This article is dedicated to the many great boards we have worked with who just gets it right, I have articulated the top five behaviours of effective boards that I have seen in action and that get the results.  

1. Getting and Staying Focused on a Shared Vision

Have you ever noticed how effective people with a common goal are?  One of the reasons why so many rides and walks are effective fundraisers and awareness raisers because everyone is focused on the same goal.  The most impressive boards I have worked with know what their vision is  and work together to achieve it.  A board that focuses on the “best interests of the corporation” is one that puts the corporation first in the context of decision making.  Recently, I heard about one condominium corporation that has won landmark decisions but is now not enforcing them.  Why?  Because the people against whom the Corporation won the decision are now on the Board and they are collectively working against the condominium corporation’s best interests to enforce the judgments won.  Aside from creating personal liability for directors by not enforcing judgments (i.e. the law), condominium boards must stay focused from board to board or maintaining the condominium corporation’s best interests.

2. Practicing Safe Communication

Facilitating meaningful communication amongst a diverse group with a goal of achieving consensus – is a mouthful and challenge – but it can be done.   Decorum in the boardroom  creates a productive and safe space in which to express opinions and explore issues and solutions for the condominium that are in the condominium’s best interests.  Respecting fellow board members, their time and their opinions allows for a more intelligent and critical dialogue about the Corporation.  Directors need to have openness at the board table.  This means all directors’ communications must be held in confidence. Great boards adhere to a Code of Ethics like that of Canadian Condominium Institute and agree that confidentiality is key. What happens in Vegas….stays in Vegas.

3. Relying on Professional Opinions

An intelligent board, often with the help of strong management, will know when an opinion is required by an appropriately qualified professional.  The Act clearly defines who are the professionals whose opinions may be relied on by Boards.  The interpretation of the interconnected relationships of laws and the condominium corporation is a highly developed set of skills.  Professionals support the critical thinking process that Boards must go through in making decisions for the communities.  Generally, board members do not have all of the expertise that auditors, engineers, lawyers etcetera have in the context of Ontario and federal laws.  Thus investing in professional opinions provides the Board with more information upon which to make an informed decision.

4. Committing to Transparency

Boards that are focused on the best interest of the Corporation will operate the Corporation transparently, that is that there will be clear information available to unit owners about those topics that unit owners need to know about.  Litigation records, employee records, as articulated under Section 55, are “out-of-bounds”.  However, where it is reasonable to do so Corporations should provide records.  Transparency is enhanced through well-structured information sessions, newsletters, websites and meaningful AGMS. Transparency enhances trust of the Board.

5. Being Informed

Every board member of a condominium corporation that engages professional management should receive at least an agenda and a detailed board package prior to each board meeting.  Directors usually meet once a month.  This means they need to be inundated with RELEVANT information so that they can make efficient and informed decisions.  An ideal condominium corporation package, in my opinion, includes, the most recent monthly financial statements, the budget statement outlining present and historical expenditures, an up-to-date arrears list, percentages indicating where the corporation is on each line item in the budget and a management report of the issues requiring board decisions.  Of course there are variations but the point is that directors need to educate themselves so as to critically think through their decisions on behalf of the Corporation.

6.  Protecting the Corporation

Otherwise known as COURAGE.  Boards need to take active steps to protect their communities.  Effective boards know the rules and ensure that everyone plays by them.  This does not mean beating anyone with a stick.  It means courteously letting residents know what the rules are.  However, if after doing so this does not happen then engaging the Corporation’s solicitors to effect compliance.  Alternatively, it may also mean having the courage to change rules from time to time that may not reflect the changing character of the community. Corporations have a duty to enforce and thus they should be budgeting for enforcement.   While I am not perfect, I find it disturbing when people repeatedly do not comply once being advised.  This is unfair to the community and each individual who makes up the community.  As a taxpayer, is it alright with you if other tax payers decide not to pay? Failing to pay means you are asking your fellow taxpayers to pay your share – that is not fair. Similarly, not abiding by the rules mean that unit owner is not being fair after agreeing to comply by the rules at the time of purchase.

The role of a director is hard work!  I commend all of those directors of boards, who roll up their sleeves and immerse themselves in caring about their communities and investments with integrity.  It is not always a glamorous job, the pay is rather low, but the rewards of great community, service, great fiscal health, marketability and a great living environment can make it easier to sleep at night and all worthwhile.

From: The Condo Voice Vol. 17, No. 1, Fall 2012 - October 2012

All of the information contained in this article is of a general nature for informational purposes only, and is not intended to represent the definitive opinion of the firm of Elia Associates on any particular matter. Although every effort is made to ensure that the information contained in this newsletter is accurate and up-to-date, the reader should not act upon it without obtaining appropriate professional advice and assistance.

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