Operating a community association is synonymous with running a business. There are customers, vendors, service providers, staff and leadership. There are products and services made available to the customers and there are prices and terms offered to the customers for those products or services.
In your community, the board of directors is the leadership arm. The board may delegate some of its duties to staff or a management firm, but it always retains responsibility. Staff, including management, may serve in an administrative or an advisory capacity. Your home owners / unit owners are your customers. They are the reason for the existence of the Association. It is to these owners the board owes a Fiduciary Duty and management shares in this responsibility.
Community association management is often compared to the operation of government. The board represents the elected officials; the owners, the constituents. Just as we taxpayer elect our officials and empower them to create budgets, spend money and pass and enforce laws, a community association empowers the board of directors. Just as government operates under a watchful public eye, but may close the doors for certain matters, the board of directors is required to conduct itself in the presence of the community members, but has the right to close the doors for certain personal and legal matters. And, as our elected officials have restrictions and conditions under which their powers are limited, our governing documents and laws place similar restrictions on our board of directors.
Most often, board members become board members either to accomplish a certain task or to do good for their community. Some have prior experience; most do not. Some have career experience that translates to community management while others will learn valuable skills from the experience of serving on the board that may take them to new places in their careers. It is management’s duty to help the board grow as a governing and managing body. It is management’s duty to keep the board focused on the entire business of the community and to not let them become narrowly focused on a particular issue. It is management’s role to guide the board to an awareness that the community will be there long after the board members have retired; that the board owes just as much a fiduciary duty to future owners as it does to each and every current owner. With this in mind, management should help the board develop policies and procedures that will survive the next election. Management should analyze the present and future financial needs of the community and present a realistic budget that meets the needs of present and future owners.
The Board Governs
- In accordance with the Law & Governing Documents
- Management is a tool used by the Board to carry-out instructions
Management’s Duty is to Advise, Counsel, Educate and Guide
- Board Training is essential and MMI will help you get it
- Speaking-up at Board Meetings – Silence is a sign of weakness
- Selling bid ideas (budgets, special assessments, major expenditures)
All Operations by the Book
- The Law Book
- The Governing Documents
Board & Management Integrity are Key
- No kick-backs, no gifts
- No special treatment for board members