The Efficiency Experts

Why is it that some co-op and condo boards hum like well-oiled machines while others sputter and fume? Why do some members get along famously with their peers while others mix as easily as oil and water? In the end, what separates harmonious, effective boards from contentious, inept, and downright incompetent ones?

There are no simple answers to those eternal questions, but a number of people with long experience on co-op and condo boards agree that three crucial ingredients come into play: motivation, dedication, and orientation. You need people who are motivated by a desire to improve the building rather than address their pet peeves or promote their personal agendas. You need people who are willing to put in long hours at a job that is always unpaid, frequently thankless and, every once in a long while, deeply rewarding. And, finally, you need people who understand that co-ops and condos are not only people’s homes, they are also business enterprises. Like any business, they need to be run by people with clear eyes and hard noses, people who are willing to check their sentiments – and their egos – at the door.

Given all that, it is no surprise that it can be difficult to assemble and run an effective board. But take heart. It may be hard, but it’s not impossible.

What’s Your Motivation?

First, the “big mo.” “At the heart of this is the fact that getting the right people determines the success or failure of the board. And that begins with the screening process,” says Arthur Davis, who served as his co-op board’s president for 18 years and now works as a freelance management consultant. He has lectured on many topics, including the leadership skills needed to be an effective co-op or condo board president. “You always want to look out for people who could be helpful to your board,” he notes “Ask yourself, ‘Are they board-worthy? Can they make the commitment? Do they have a personal agenda?’”

Davis believes this last question may be the most critical of all because so much flows from a person’s motivation – their willingness to put in the necessary hours, their willingness to put the common good above personal interest.

“As a director,” he says, “you have to ask a potential board member, ‘Why do you want to be on the board? Where have you volunteered before?’ The best way to manage the transition is to aggressively reach out to people who have volunteered in the past, who don’t have any set agenda, and who you know you can work with.”

Sometimes, a person joins the board for all the right reasons but gradually becomes set in his or her way or runs out of energy. Operating on auto-pilot is not recommended and that makes periodic infusions of new blood a wise idea. “I think it’s essential to have turnover,” Davis says. “It brings fresh perspectives. If people serve long-term they tend to become too comfortable or they burn out. It becomes their life. Spending too much time on the job can be a bad thing.”

Steve Abramson agrees. After serving as treasurer of his Upper West Side condo board for 18 years and treasurer of his Long Island homeowners’ association for five years, he has become sensitive to the potential dangers of boards that become too comfortable in the job.

“It could be a problem for several reasons,” he notes. “If you get too comfortable, questions stop. With new blood you get new ideas; new board members start asking questions. And then there’s the question of financial oversight. Over time, people could get slack. In collecting arrears, for example, there’s always a possibility of collusion. I’ve never seen that at either of my buildings, but, yes, it can happen. Who’s looking over your shoulder?”

Abramson, who works as a pension consultant, admits that performing such a “blood transfusion” is easier said than done. “Most people don’t want to be bothered with board service,” he says. “Generally speaking, our boards don’t turn over. People want to tell you what they don’t like, but they don’t want to get on the firing line and try to change it.”

Dedicated Types

The antidote to such apathy is both obvious and maddeningly elusive: finding qualified people who are willing to get on the firing line. Even when you find them, they’re likely to need some serious on-the-job training. “Most people who come on our board have no training in building management,” says Chuck Wall, a book editor who has served on his Manhattan co-op’s five-member board for 20 years, first as treasurer and now as president. “I try personally to communicate as much as I know.” As examples, he cites new city regulations on elevator inspections and new requirements for site-safety inspectors on construction jobs. In addition to these predictable expenses, there are the hidden costs that pop up in any capital improvement project and thus demand constant vigilance.

Wall’s co-op is involved in just such a project at the moment. When the marble front threshold in his century-old building cracked, water leaked into the basement. It appeared to be a straightforward repair job, but when workers removed the marble they discovered extensive structural damage. It probably shouldn’t have been a shock, given the building’s age, but it reminded Wall of one of the eternal verities of board life: “It’s amazing how quickly costs on capital improvements can escalate and how carefully you have to watch them.”

To keep up with changing laws and regulations, Wall attends seminars staged by the Council of New York Cooperatives & Condominiums, and he encourages fellow board members to join him. The first thing they tend to learn is how much they need to learn. “People usually come on our board because they want to address a particular problem or issue,” Wall says. “But after a few meetings they tend to realize that their issue is just one among many, and it’s not the most important one.”

Wall stresses that he’s not being critical. In fact, he praises his current board’s collegial spirit and diversity. The other members are a nurse, an architect, an event planner, and a business manager. “No one has a desire to make things acrimonious,” he says. “Everyone wants to work together. The viewpoints they bring are about what families will want. There’s a willingness to work together to solve problems, as opposed to insisting that others agree with your position. You should come to a board meeting prepared to learn, rather than thinking you already have the solutions. You’ve got to be able to bend.”

In addition to being flexible, you’ve got have a thick skin. “Board members need to realize disagreements can’t be taken personally,” says Abramson. “That’s not the nature of the discussion. Decisions by the board have to be focused on the whole community, not on any individual or group of individuals. And you need to realize that no decision’s going to make everyone happy.”

He agrees with Wall that diversity is a virtue – not only in board members’ work backgrounds but also in their temperaments. “We have two attorneys on our board, business people, some born in other countries, a retired medical professional,” Abramson says. “It gives you varied opinions and outlooks. I think you also need a diversity in personalities. If you have a lot of hard-nosed people, that creates conflict. You need mediators too. Otherwise, the board will move in the same direction all the time, and it may not be the right direction.”

Another way to avoid that is to enlist non-board members to participate on major projects. By delegating authority to committees, such as when a lobby renovation is planned, boards can get fresh ideas and lighten their own work load. This happens routinely at a 66-unit co-op in the Riverdale section of the Bronx, where there are standing committees to handle such items as admissions and green initiatives, and ad hoc committees are appointed when there’s a major capital improvement, such as a façade restoration. The committees usually have three to five members, and about half of those are from the board.

“Committees are a unique way, and probably the best way, to involve non-board members,” says Michael Alvarez, a financial control analyst with CitiGroup who has served on the co-op’s board since 1995. “When there’s a major capital project, it’s not logistically possible to involve the full board on something that requires quick decisions. You need a committee that’s on the ground, so to speak.”

There are other advantages, he says. Committees tend to dispel the illusion that boards operate in a “closed, smoky environment,” and they often prove to be a superb recruiting tool. “Getting an effective board is difficult because the work is so time-consuming,” Alvarez says. “There’s a reluctance to join the board. But joining a committee seems to be the perfect way for shareholders to see how the board actually works. If shareholders don’t have time to serve on the board, at least they can have an impact on the running of the building. And a lot of committee members, after serving for a year or two, tend to join the board. It’s a way to groom them and acclimate them to the roles and responsibilities of a board member.”

And finally, there’s the efficiency payoff. “Committees can get more done than the full board,” Alvarez says. “Without committees, things would never get done.”

Orientation: Dizzy or Decisive

Diversity is a wonderful thing, agrees Davis, the consultant and former board president, but he places it a distant second to a board member’s most valuable skill: some sort of business expertise. “Never forget you’re running a business,” he advises. “One of the keys is to look at this as running your own company. You have budgets, contracts, deadlines, goals.” Wall agrees. “It’s a lot like running a small business with employees and a budget and a great deal of responsibility,” he says. “I’m always surprised by the New York City rules and regulations you’re required to know about.”

One result from having a board with a grounding in solid business practices is that things tend to get done in a, well, business-like fashion. Board members read minutes and agendas before the meetings. Discussions stay on point. Decisions get made. Items get checked off the agenda. Such boards are then free to meet fresh challenges head-on.

Such efficiency can result in a one-hour meeting where all the necessary decisions get made. The lack of such discipline and efficiency can result in a five-hour meeting that begins with a discussion of the elevators, wanders on to questions about the windows, and ends up with an argument over the boiler in the basement – with nothing getting resolved. Such horror stories are legion.

“You have to stay on top of situations, push the management company repeatedly to make sure that things get done,” Wall says. “That’s one of the things that takes a lot of time. But if you don’t do it, problems tend to drag on.”

“You want the agenda to keep turning over,” adds Davis. “That’s the president’s job. You can’t have the same issue keep coming up for six months.”

Yet the quickest decision is not always the best decision. There will come times when extensive discussion and deliberation are required. “One of the chronic complaints from people who live in co-ops and condos is that it takes forever to get things done,” says one board president of a condominium in Queens. “But, I’ve always thought that more thought is better than less thought. If someone asks a question and we don’t know the answer, we’ll put it off until the next meeting unless it’s an emergency.”

The source of this chronic complaint about inaction, Shusterhoff believes, is that residents who don’t sit on their board tend to have very little idea what sorts of constraints and challenges board members face. “Projects in co-ops and condos require a lot of planning,” Shusterhoff observes. “We have a diffuse level of authority, not like a corporation with a powerful CEO. We can’t just hire any contractor. We have to do due diligence, get competitive bids, get design work done, sign contracts. Things have to be done correctly, and that should take the appropriate amount of time. Unless you’re on your board, you have no idea what’s going on.”

And that brings us to a simple question: why would anyone want to serve on a co-op or condo board? Why would anyone in his or her right mind volunteer to spend countless hours doing painstaking work that carries zero financial reward and the distinct possibility of headaches, stress, and abuse?

Wall has an answer: “Because it’s the best thing you can do to protect the biggest investment in your life. If you want to have a say in how the building is maintained, how the money is spent, you should consider getting on the board. It’s a tremendous education in a very arcane field, and it’s a terrific way to make sure your investment is taken care of.”