The Board of Managers - Part 2

To assure that candidates for office as members of the Board of Managers are informed of the responsibilities that come with their office, our association requires that all candidates seeking election to the Board of Managers sign a document containing the following statements:

1. Each director is required to attend monthly meeting.
2. Each director shall serve on at least one committee.
3. Each director shall not use the Board to promote the director's personal, financial or political interests during the director's tenure on the Board. Each director shall disclose any potential conflicts as they may arise.
4. A desire to work in Cooperation with other Board members/residents/contractors for the best interest of all residents and the entire property.
5. POWERS AND DUTIES OF THE BOARD OF DIRECTORS: To provide for the operation, care, upkeep, maintenance, replacement and improvement of the common elements; provide for employment/dismissal of personnel for the maintenance and operation of the common/limited common elements; to adopt/amend rules and regulations according to the guidelines provided by the Illinois Condo Act and implement procedures under the direction of the Association's attorney; provide sufficient insurance; maintain adequate records and receipts; to have access to each unit to provide for necessary maintenance, repair or replacement of common elements or for making emergency repairs to prevent damages to common elements; to impose charges for late fees/rule violations/damages to common elements and other designated duties.

Candidates are required to sign agreement to the above and are also required to provide a list of their qualifications, to provide a brief written statement of their policies and objectives and to state in writing their time conflicts.

In signing the candidates form, potential candidates acknowledge they have been informed as to the nature of their duties. It is their responsibility to review the Illinois Condominium Act and any other documents to obtain clarity about the task which they are undertaking. Of course, our professional managers are available and it is possible to discuss any issues or concerns the candidate may have about performing his or her duties. The candidate may also have conversations with members of the board. Finally, the candidate can obtain independent counsel to discuss the duty and role of the Board of Managers. Our city is relatively compact and is the county seat. There are attorneys available who specialize in condominium law and can provide guidance to prospective candidates.

Elections of the Board of Managers provide that not all seats be filled at any one election. This accomplishes continuity of service; it could be disruptive if an entire board is replaced at any one election. It might also be expensive to the Association, as our professional managers have limited time to devote to training of the Board, and accountants and attorneys frequently charge by the hour. As is the case with any complex undertaking, the true nature and complexity and even the time requirements, may not become apparent to the newly elected, until after they are "on the job". The agreements of office are not "open ended" and are of fixed term. In the event of severe time or other conflicts, a member of the Board of Managers can resign. However, there is some time flexibility in the "Board Member Oath" which is the official swearing in of the new Board member. I would think it would be preferable from the Association's perspective, if a member of the Board successfully completes their term in office.
As I stated in Part I, there are no training pre-requisites for a position on the Board. Of course, if a candidate reviews the Property Act which defines the duties and responsibilities of the Board, the "Board Member Oath" and also the Bylaws of the Association, it should be apparent that the position does require the ability to perform certain tasks and a willingness to be of service to the association. Our professional managers can and do provide guidance to the board in all matters and the candidate does make a statement of his or her qualifications. Of course, the board must continue to operate and fill vacant seats.

Candidates are usually elected, but there is a procedure for appointment of candidates. This procedure was used by the Board during the May meeting to fill the vacancy created by the resignation of our President sometime after the April meeting.

Each Director, a member of our Board of Managers, takes an oath. This is a signed document which includes 14 points. This document serves to instruct and to inform and to elicit agreement from the member who signs it. It defines in straightforward English rules of conduct and what is expected of the Director. The oath begins with “I, a duly elected/appointed director of the Association, do solemnly swear and do hereby affirm as follows:”

The Oath then lists 14 points. I provide the following as information to instruct and inform unit owners of BLMH. The following MAY NOT be reproduced:

1. I will attend as many meetings as possible and prepare in advance by reviewing all materials.
2. I understand that if I miss three consecutive meetings without good cause, the Board can declare my seat vacant and appoint another owner to complete my term of office.
3. I will avoid-self dealing and will place the Association’s interests above my own personal agenda.
4. I will cooperate with the other directors and follow the rules of decorum and parliamentary procedure for every meeting, and act in a courteous and civil manner toward my fellow directors, homeowners, employees and contractors of the Association.
5. I will not divulge confidences or sensitive information to non-directors.
6. I will not attempt to micro-manage or interfere with the management of the Association or the performance of Association contractors.
7. I will always act within the scope of my authority as a director/officer and in the best interests of the Association.
8. I understand that no officer or director has any authority to act independently and that all Board member responsibilities are a direct result of the approval of the Board.
9. I understand that I am a director of a not-for-profit corporation and I will not directly intervene in any homeowner disputes.
10. I shall at all times obey the rules of the Association, even if I disagree with them, and shall remain current in the payment of all fees and expenses charged by the Association.
11. I will not make public statements without the express authority of the Board.
12. I will recognize that I am a fiduciary on behalf of all owners and in all decision-making by the Board I will attempt to use sound business judgment.
13. I will be sensitive to individual differences, respectful of dissenting opinions and cooperative in implementing the will of the majority of the Board.
14. I will at all times make a full disclosure of any potential conflict of interest, refrain or abstain from voting on any issues that I have a direct economical benefit and at all times avoid even the appearance of impropriety.

The oath then closes with this statement “In the event that I cannot faithfully fulfill my duties as a director or officer, I shall submit my resignation from the Board. In the event I violate any of these provisions of my oath of office, I understand that I can be suspended or removed from my duties as a director and/or officer.” The oath ends with “Agreed “ and is then signed and dated by the member.

So in taking on the role of a director of our non-for-profit corporation, each member of our Board of Managers makes serious agreements. In doing so they perform a valuable and irreplaceable service to our Association, and to each and every unit owner. This is certainly not something every unit owner would agree to and in some associations this has caused serious difficulties. Apathy in associations can reach a level where no one will volunteer to be on the Board. If you sometimes wonder, upon attending meetings, why you see the same faces among the Board for a number of years it may in part be due to a low interest on the part of Unit Owners. Another indicator is the short list of candidates for each election.

So what does a member of the Board agree to and what can be expected from them? Perhaps the most difficult thing is that they will surrender their agenda and put aside their personal interests and be of service to the Association. They agree to do real work. They also agree to operate on behalf of all unit owners, and not intervene in unit owner disputes, which means they are prohibited from taking any sides. The Oath, Candidacy form and other agreements, and the legal definitions of "fiduciary duty" as relating to being a member of the board of directors of our Association under the Property Act, requires that all unit owners be treated equally. This is covered more thoroughly in Part 1.
Board members agree to be “leaders by example”, in which they agree to obey the rules of the association and pay all fees in a timely and prompt manner, perform their duties as a member of a team and only within their authority and never act independently. They will only make public statements with the express authority of the Board and will at all times be courteous and civil to each other, the unit owners, our professional managers and contractors. They agree to follow rules of decorum and parliamentary procedure which implies they have or will acquire sufficient knowledge to do so. Some Boards follow “Roberts Rules of Order” and others use somewhat abbreviated rules and procedures. Whichever is used, members of the Board must be familiar with them.

Members of the Board agree to avoid conflicts of interests, and not to derive “economic benefit” from their position. They also agree, as part of the candidacy, to adapt rules according to the guidelines of the Illinois Condominium Act. This implies they will acquire some familiarity and knowledge of the details of that act.

Members of the Board of Managers agree to use sound business judgment in performing and fulfilling their fiduciary duties. A fiduciary duty is a legal relationship of confidence or trust between the Director and the association. It requires that the member of the Board will act wisely and with prudence on behalf of the Association.

There will be varying skills among the Directors. They are ordinary people and probably do not have a legal degree, an MBA or are proficient in accounting. They are probably not professional business men and women, or are members of a building trade. However, with an emphasis on “team” it is possible for the Board of Managers to fulfill its fiduciary duties and specific tasks. For example, if the Association were a small boat and each of the members of the Board of Managers were in a seat and given an oar, it would be possible for the boat to reach its destination if one or more members is skillful at map reading, others at orienteering and the use of compass, others at reading the weather and water, still others possessing keen eyesight for discerning landmarks and objects on the horizon and if all members exercised common sense and were willing and able to follow instructions, defer to another and pull in unison on the oars. It would also require that one member be a leader to coordinate the efforts of the board and keep everyone on task. On a boat this individual is sometimes called a coxswain. On our board, that person is called the “president”. It is useful to note that the etymology of the work “coxswain” is derived from the English words “cox”, a small boat and from “swain”, a “boy in authority”. A coxswain is literally a “boat servant”. So it is with our Board President!

Obviously, the Board must collectively have sufficient business skills to get the job done and the members of the Board of Mangers must be willing to prepare for meetings as agreed and in taking on their duties and assignments, also agree to a growth experience and to learn and listen.
In the next part, I’ll take a look at some of the specific duties and responsibilities performed by the members of the Board and some of the issues they may face in performing their duties. In future posts I’ll look at the relationship of the Board to the Association which includes the unit owners, our professional managers and our contractors. I will also look at the Association members, which are the Unit Owners, and finally at the synergies that exist in the three groups; which are our Board of Managers, our Unit Owners and our contractors and hired guns.