Andrews BC: The Transition

THE BIG PICTURE

Boards are typically an eclectic group of individuals with varying backgrounds, experience, and history. In most cases, board members learn to operate harmoniously for the greater good of their building. In some instances, strong personalities can interfere with that greater good. There can be differences of opinion, control issues, and personality conflicts, to name a few. Whatever the board’s direction, it is the manager’s position to provide the guidance, information, and wisdom to assist the board as a whole as well as the individual directors toward the goal of maximizing the benefits for their building. This is especially critical in working with a board in which one member has become the dominant personality. In such a case, there may not be a common goal or direction for the building.

Let’s look at the situation where one board member has been running the show for over 20 years. During that time, maintenance has stayed the same, the appearance of the building has remained roughly the same – but there is a lot of deferred maintenance. There are other board members, of course, but they allow the one member a free hand because the maintenance is low, and they don’t want to get into a fight.

BE SMART

In such a situation, as manager, we would involve the rest of the board, including new members. A comprehensive analysis would be developed identifying the issue at hand, options for resolution, and the effects of such options. As an example, consider an enhancement of the lobby, with its related costs and the effects this would have on the budget and monthly charges. There may be a need for a maintenance/common charge increase, an assessment, or some type of financing. This may be contrary to the direction in which such charges were kept artificially stable through deferred maintenance. One of the board’s duties is to maintain/enhance the value of the property, and such a presentation by management would help do that.

Getting other board members involved in the process, along with the dominant member, is a way of easing everyone into working collegially on building issues and solutions. Having the entire board working toward the development of their collective goals benefits all parties. It allows for the forward-thinking and planning that is necessary in this real estate market.

In a situation like that, as manager, I would get the attention of the rest of the board, including new board members, and show them that the one board member should not make all the decisions on his or her own. The board must be involved, and it must be shown that a change is needed. Such a change could mean raising the maintenance, having an assessment, taking out a line of credit, or just renovating the lobby because it hasn’t been done in 20 years. The board has a duty to increase the value of the real estate.

I would advise the board members to speak collectively about changes. They should create an agenda with solutions and make decisions based upon that. The board’s mantra should be: “We’re interested in increasing the value of the property and also in beautifying the building and making it safe.” Separating into committees to do the legwork is smart and forward-thinking. Allowing one board member to control the building is not.