Are You and Your Board as Effective as You Can Be? Start With These 6 Priorities
Download our Board Self-Assessment.
How well is your community association board functioning? Are board members working collaboratively to meet the community’s interests? Do your meetings feel fluid and productive, and are your operations running smoothly?
Whether you are new to your board or a seasoned board member who wants to ensure your board is doing everything it can do to succeed, we have identified the priorities that can help you get the answers you need. Use these observations as a benchmark against which to measure your own board’s effectiveness in these 6 key areas, then download our interactive checklist, Board Self-Assessment: How Well Are We Doing Our Job?
Board Priority #1: Communication
One of the most telling signs of a board’s effectiveness is how well the board communicates with residents. According to Ivy Montero, vice president at FirstService Residential, it’s critical that boards establish a reputation of transparency with residents. “Time and time again, we see the importance of transparent communication. When boards are open and honest with the community, residents are more likely to trust the board’s decisions, knowing that they have the association’s best interest at heart.”
Katharine Effron, vice president at FirstService Residential Florida agrees. “The residents have the right to know what’s going on in a community, and we have a duty to relay that message.”
Your residents may have different preferences in how they receive information, so it’s generally a good idea to use a mix of digital and traditional channels. Some options include email, a monthly newsletter, your community website, text messages, postal mail and bulletin board notices. “We should always remember to choose the right means of communication for the right message,” Effron said. “For instance, in an emergency situation, posting news on a less-frequented message board isn’t ideal. Instead, use a messaging platform that can reach everyone quickly and effectively.” For example, FirstService Residential Connect™ allows you to text or email all residents at once in an emergency or with other information that impacts the whole community.
It’s also important to make communication a two-way street. Boards should actively seek resident feedback, through surveys, town halls and other means. Keep surveys short and establish the frequency at the outset. The more feedback residents can give, even without attending meetings, the more they will feel part of the community. Additionally, when you involve residents more often, you’re less likely to receive pushback when implementing new policies.
Board Priority #2: Finances
Transparency is equally important when it comes to finances. “Your association should give owners access to reconciled financials,” said Matt Sluizer, director of client relations. “It’s a good idea to give them context into what the numbers mean, including expenses, line-item variances and the association’s cash flow as well as cash flow projections for the year. Without that, they may not have the full picture or a clear understanding of the association’s financials.” He added, “However, remember that it’s not your job to know everything when it comes to complex association financials. Work closely with your management company, who should provide you with access to financial professionals and budget resources to help you develop a healthy budget.”
Boards should also review contracts annually during budget season and, if necessary, renegotiate them or request bids for the upcoming year. Chris Normandeau, director of FirstService Energy, added, “Service needs can change over the course of a year, which is why it’s important to evaluate your vendor contracts. You may have a more cost-effective option or you may need to expand services provided.”
“Another important piece to consider is the reserve study,” said Normandeau. Make sure you have an up-to-date reserve study that considers the current financial landscape.”
Along with transparent financial communication and annual contract reviews, be proactive when you plan your budget. “In the second half of the year, start by surveying your community to understand what priorities they have,” said Danny Ellis, president at FirstService Residential. “Assess those results, your current financials as well as the practical needs of your community, and partner with your management company and financial partners to make decisions that work in your community’s best interest.”
Board Priority #3: Governance
Members of your board need to understand their roles and limitations, and that requires being familiar with your governing documents, as well as state and local laws that affect your community. “As a volunteer board member, understanding what you can and cannot do should be your priority when you first join your association’s board of directors,” said Montero. “Abiding by these principles can protect you and your association from costly mistakes or even liability.”
Your board also needs to realize that there is a definite hierarchy to your governing documents. For example, covenants, conditions and restrictions (CC&Rs) or Declarations of Condominium trump rules and regulations and architectural guidelines. “While you can review each of these documents on your own, work with your attorney to help you interpret and understand them,” Montero said. “Additionally, FirstService Residential provides training to help boards understand these important documents, so that they can develop policies and make decisions with ease.”
Board Priority #4: Leadership
Homeowners place their utmost trust and confidence in their board to protect the community’s property and money. This fiduciary duty is a primary board responsibility, but not everyone understands what that means.
“When you’re elected to a board of directors, you have a responsibility to make decisions on behalf of the entire community – that means taking personal interest out of it,” said Maureen Connolly, vice president at FirstService Residential . “At the end of the day, your association is a business, and it’s important that you operate with that in mind. That means avoiding conflicts of interest and making decisions on a professional basis, not an emotional basis.”
Connolly added that boards should partner with their management team to define a vision for the community and make sure everyone is aligned on that vision. “After defining your vision, you and your board should identify your 10 main priorities to help achieve that vision,” she said. “Then, work with your management partner to tackle the top three of those 10 priorities, setting budgets, determining deadlines and assigning board members to lead those projects.”
As leaders, board members have three important roles:
- To be servant leaders: Serving the members of the community rather than their own needs, as well as empowering others to build strong relationships
- To be community builders: Fostering mutual respect, establishing protocols for interactions among board members and with the community, developing a sound visioning process for the community and collaborating with local municipalities
- To be staff facilitators: Seeing staff and vendors as partners in creating a successful community
Board Priority #5: Meetings
Here again, transparency is a priority that plays a role in your effectiveness as a board. Make meetings as accessible as possible to homeowners by offering ways for them to attend via conference calls or webinars if they cannot in person. Have board meetings at a set day and time every month and have an agenda clearly set for items that are ready for an action of some kind. Being prepared will help you conduct the business of the association more smoothly and quickly – no more 3-hour meetings!
There are times when the board needs to meet for confidential reasons such as discussions of legal matters. Those executive sessions are separate from general board meetings and, understandably, not open to residents.
Establishing a code of conduct can help make your board meetings run more smoothly, too. For board members, this would include refraining from engaging in debates with homeowners, disclosing conflicts of interest and recusing yourself from any related votes to remove the perception of impropriety.
Board Priority #6: Reserves
It’s important to get your reserve study updated regularly by a qualified specialist. Conduct a basic update every year (site visit isn’t necessary) and a more comprehensive update (with a site visit) every 3 years, depending on the size and complexity of your association. If you undertake any major capital improvements, plan on having a comprehensive update the following year as well.
How diligent you are about preventive maintenance will have a significant impact on the useful life of your components and, in turn, your future reserve requirements. “Similar to your budget, your reserve study is more of a guide than a set of hard and fast rules,” said Bobet Bennett-Marshall, senior vice president of financial services at FirstService Residential. “For instance, if you’ve invested in preventive maintenance, you may find that some of your components have longer useful lifespans than your reserve study predicted. On the other hand, you may have to replace some components sooner than expected because of external factors outside of your control, like wear and tear from a bad storm or hurricane.”
Bennett-Marshall also recommends evaluating the yield you are getting on your reserve funds to ensure you maintain healthy reserves. “We recommend assessing your yield on a bi-annual basis,” she said. “At FirstService Residential, we help our boards with these reviews by providing a list of our banking partners and yields with their monthly financial statements.”
How Can My Board Be Even More Effective?
By prioritizing these 6 areas, your board can ensure that your association remains a viable organization and that your community continues to be a place that residents are proud to call home. Work with your management partner and fellow board members to assess where you are succeeding and where you have room to grow. For a quick check-up based on these 6 priorities, download our interactive checklist, Board Self-Assessment: How Well Are We Doing Our Job?