Educating Board Newbies

Wake-up call. Generally speaking, new board members just don’t know what’s in store for them and often underestimate the extent and seriousness of their roles. When I meet with people who have just joined, I tell them the fun part of running for the board is over, and now the hard part has begun. Most important is their fiduciary duty to act in the best interests of the community. We give them a code of ethics and then explain in depth how serious it is. They’re entering into a special relationship built on faith and trust. They’re saying to their fellow shareholders or unit-owners: “Trust me. I can do this, and I’m going to do it legally and properly.” And we emphasize the consequences of breaching that duty, including potential legal action and personal financial accountability.

The foundational texts. I tell new board members to read the governing documents, be they the proprietary lease at a co-op or the articles of organization and declaration at a condo, from top to bottom. They spell out what you’re supposed to do and what you’re not supposed to do, which will help guide decision-making while helping to ensure that you’re adhering to legal standards, avoiding discriminatory actions and acting within the scope of your authority — all of which will mitigate legal risks. 

A high-stakes game. What many people learn is that it’s not just their own agenda that matters; it’s got to be the board’s agenda. Everyone has to work collaboratively. I remember years ago, when we first started in this business, some of these co-ops or condos would have a $100,000 budget. Many are in the millions now. This is a serious matter because these are funds that the board members have been entrusted to take care of.