(Original article posted on the WB Digital Newsletter Stream)
As a member of your condominium corporation’s board of directors, you have a responsibility to educate yourself about the community. Residents have elected you to make decisions on their behalf, and it’s essential to be well-informed about your duties and role. The following are ten areas to focus on as you prepare for the job.
1. Condominium Concept
To be an effective board member, it’s crucial to understand the concept and structure of a condominium corporation In general, a condo is a not-for-profit organization set up to help run, manage, and maintain a neighbourhood, building, or another collective of homes. People who own condominiums pay monthly dues, which the corporation uses to maintain shared spaces and carry out other duties, like rules enforcement, meeting management, and financial planning. An elected board of volunteers runs the corporation on behalf of all homeowners.
For an interesting historical perspective of condominiums in Ontario, take a look back at this archived video from a 1968 CBC news story – A condominium? What’s that?
2. Corporation History
All directors must have a clear understanding of their corporation’s past, a vision for the future, and knowledge of the present. Your community’s succession plan will typically provide detailed historical records and include the resources you’ll need to lead with confidence and make the best choices moving forward.
3. Governing Documents
As you transition into your role, you’ll also need to know your purpose, duties, and obligations. All of this information can be found in your corporation’s governing documents. The governing documents include the declaration, bylaws, policies, procedures, resolutions, guidelines, and rules and regulations. Ensure you read your governing documents thoroughly, comprehend them, and abide by them.
4. Local, Provincial and Federal Laws
In addition to the corporation’s governing documents, board members should become familiar with standards established by local, provincial, and federal laws that apply to condominiums. Some board members become very active and build relationships with local government officials and become engaged in the legislative process. Many government offices can significantly impact your community, and these connections and involvement will help maintain and improve the quality of life for residents.
5. Code of Professional Ethics
Most boards have adopted a Board of Directors Code of Professional Ethics. This code should outline expected behavior regarding integrity and objectivity, confidentiality, technical standards, conflicts of interest, and more. Board members should adhere to the Code of Professional Ethics whether you’re at a board meeting or setting an example for the community.
To enforce adopting a code of ethics, the board should consider the advice of their solicitor and incorporate the code into a by-law.
6. Community Partner Roles
The best board members understand that they’re not experts at everything. It’s often necessary to seek out and respect the advice of professional partners and service providers, like your condominium manager or your corporation’s lawyer, auditor or engineer. Educating yourself on their specific roles and acknowledging their expertise will help the board make better, more informed decisions.
7. Insurance Policies
Creating a comprehensive insurance plan is a big undertaking that shouldn’t be treated as just another item on the board’s to-do list. To successfully secure and maintain insurance policies for your corporation, you must consult your governing documents, carefully assess your community’s risk, match insurance products to your areas of risk, and partner with an expert. It’s also recommended that board members purchase separate Directors and Officers Liability policy (D&O) to cover any wrongful acts.
8. Financial Matters
Managing and overseeing the community’s finances is one of the board’s most significant tasks. The majority of condominium communities are multi-million-dollar not-for-profit corporations, which means the board runs a small to mid-size business—with all the decisions, exposure, and liability that come with it. You must understand where, how, and why money gets spent. It’s essential to closely examine budgets, ensure compliance, and review monthly financials, contracts, financial statements, utilities, and recent reserve studies.
9. Communication Processes
Effective communication is one of the most important tools available to promote a positive and cooperative spirit. Because communicating actions and the status of activities to owners is the board’s responsibility, you must become familiar with the communication processes and protocols in place. Confirm expectations and make sure residents know how to access and receive information.
10. Mandatory Board Education
In accordance with the Condominium Act, board members are required to complete mandatory education to help them become familiar with the specifics of governing a condominium in Ontario. The education is provided free of charge by the Condominium Authority of Ontario and must be completed within six months of being elected, appointed, or re-elected to the board unless the training has already been completed within the previous seven years.
I’m On the Board. Now What?
At Associa, we’ve seen it all, and we know all about the stress and responsibilities of being a brand-new board member. That’s why we’ve put together a comprehensive resource guide to help. In our ebook, “The Complete HOA Board Member Starter Guide,” we’re giving you the collective knowledge of our 40+ years of experience working alongside countless board members to improve their communities. Download it now to learn the fundamental roles and responsibilities of an HOA board, how to find success, and more.