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Man on laptop looking at assessmentHow well is your community association board functioning? Are board members working collaboratively to meet the community’s interests? Are your meetings 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 to succeed, we have identified six priorities on which to focus to up your board’s game. Download our interactive checklist, Board Self-Assessment: How Well Are We Doing Our Job, to measure your own board's effectiveness in these key areas.

Board Priority #1: Communication

A board's ability to communicate with residents is one of the most telling signs of its effectiveness. Ivy Montero, vice president at FirstService Residential, says boards must be transparent 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, wholeheartedly agrees. “The residents have the right to know what’s going on in a community, and the board has a duty to relay that message.”

Residents may have different preferences for how they receive information, so it's generally a good idea to communicate with residents via a number of channels – both digital and traditional. There are many options, including email, a community 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.” FirstService Residential Connect TM, for example, allows you to text and email all residents at once in an emergency or with other information that affects the whole community.

Making communication a two-way street is also important. It is important for boards to actively seek resident feedback through surveys, town halls, and other methods. Residents will feel more part of the community if they can give feedback, even without attending meetings.

Furthermore, when you involve residents more often, you are less likely to encounter pushback when implementing new policies.

Board Priority #2: Finances

When it comes to finances, transparency is equally important. “Your association should give owners access to reconciled financials,” said Matt Sluizer, director of client relations at FirstService Residential. “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 following 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.”

Be proactive when planning your budget, and transparent with financial communication and annual contract reviews. “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

Board members must fully understand their roles and limitations, and that requires familiarity 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.”

It is also important for your board to understand that your governing documents follow a definite hierarchy. Covenants, conditions, and restrictions (CC&Rs) or Declarations of Condominiums, for example, 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

The board of directors is entrusted with the responsibility of protecting the community's property and money. Board members have a fiduciary duty, but not everyone understands exactly 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.”

According to Connolly, boards should work with management to define a vision for the community and ensure that everyone is aligned with 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.”

Board members have three important roles as leaders:

  1. 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
  2. To be servant leaders: Serving the members of the community rather than their own needs, as well as empowering others to build strong relationships
  3. To be staff facilitators: Seeing staff and vendors as partners in creating a successful community

Board Priority #5: Reserves

A qualified specialist should update your reserve study regularly. Depending on the size and complexity of your association, conduct a basic update every year (site visits aren’t necessary) and a more comprehensive update every 3 years. Plan to have a comprehensive update the following year if you make any major capital improvements.

Your proactive maintenance approach will have a significant impact on the useful life of your components and, therefore, 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.”

To ensure healthy reserves, Bennett-Marshall recommends evaluating the yield you are getting on your reserve funds. “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.”

Board Priority #6: Meetings

Again, transparency is a priority that plays a role in your effectiveness as a board. Provide homeowners with ways to attend meetings via conference calls or webinars if they cannot attend in person. Schedule a set day and time for board meetings each month and plan a clear agenda for items requiring action. Preparedness will make the association's business run more smoothly and efficiently – no more 3-hour meetings!

Sometimes the board needs to meet for confidential reasons, such as to discuss legal matters. These executive sessions are separate from general board meetings and are closed to residents.

A code of conduct can also help your board meetings run more smoothly. This means that board members should refrain from engaging in debates with homeowners, disclose conflicts of interest, and recuse themselves from any related votes to avoid the perception of impropriety.

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 remains a place that residents are proud to call home. Work with your management partner and fellow board members to determine where you are succeeding and where you can improve. For a quick check-up based on these 6 priorities, download our interactive checklist, Board Self-Assessment: How Well Are We Doing Our Job?

Tuesday September 13, 2022