MY CRASH COURSE FOR BOARD MEMBERS
Or : How to become a masochist in one easy lesson
I began my life as a board member in 1974, when I was elected to the board of a quaint little 133-unit complex in Southern California. This experience was motivated by one simple precept, GREED. The value of my home, so I thought, was directly related to the ambiance and upkeep of the surrounding neighborhood. And since this was the largest investment I had ever made in my life, I knew I was solely responsible for the increase or decrease in the value of this particular investment. It was truly an education that everyone should try once in their lives, but some people like bungee jumping with their ankles tied together from tall buildings as well.
As a matter of course the board meetings revolved or “degenerated” depending on your point of view, into what those of us in the industry now refer to as the 5 “P’s”. I have found several more over the last 40 years, but the major ones are Plants, Pets, Pools, Parking, and Pests, both the two legged and eight legged types. Of course, the sixth and very important “P” is politics, because keep in mind you are now part of a mini government. As a matter of fact, the board of directors dictates policy. Yes, my fellow owners, you elected them and now they are telling you what to do, how to do it and when, as well as who, what, where you can and why you can’t. You can always vote them out of office, but to some that is a blessing and not necessarily punishment.
The bottom line is that when you are elected to that venerable position as a trustee or director, you take on an enormous responsibility. The first is a fiduciary responsibility to protect, maintain and enhance the assets for your association. The next is a responsibility to your neighbors to look out for their best interests and put the interests of the community above your own individual wants and wishes. Probably the most vital function a board member plays is to run the association as if it were a business. This is the most difficult point to get across to new board members.
The fact that you are now in charge of a multi-million-dollar corporation. This is hard to grasp for someone who may be used to serving on the refreshment committee for the local PTA or a local volunteer or charitable organization. Just like any major corporation such as IBM, General Motors, or AT&T, you have similar responsibilities to your shareholders and more. You now must be concerned with cash flow analysis, maintenance schedules, budgetary considerations and maintaining “a balanced budget”. The downfall of many a president and congressional representative over the past several decades.
GET A LIFE – AND SOME EDUCATION
The very first thing you should do is turn to the inside front page of any magazine related to HOAs, Common Interest Developments, or Community Associations and email or text the circulation or sales department. Ask them how you can purchase all the back copies of the magazine and get them. Do not worry about the cost, charge it to the association and start a permanent library for future boards to refer to when they need information. This is part of your crash course. Now find a free weekend, oh yes, we forgot you are a board member now, there are no more free weekends. Well maybe you can squeeze some leisure reading in between the landscape committee meeting and the rules violations meeting next week. If you are able, try to read some of the articles or other publications involved in the community associations and resort or interval/timeshare industry. You will be surprised at how many different and unique situations (problems) are covered or uncovered as well as some novel solutions to these situations.
The next step you should take is to purchase, rent, borrow or subscribe for online access to several very well-done videos, blogs, or webinars that outline the responsibilities of the board. These presentations are probably one of the quickest ways to immerse yourself in the real-life drama that unfolds when you serve on a community association board.
Finally, attend a seminar or two, or three or more… It’s easier now as you can just go online for these seminars offered by organizations such as CAI, ARDA, IREM, CACM, ECHO, or other professionals in the industry can enlighten and educate you. They can also be quite amusing when it comes to some of the horror stories that surface for discussion. Like I said, you are on the board now and you are not allowed any free time for family, friends or festivities. Not until you have served your time, I mean paid your penance, no sorry, suffered the trials and tribulations of serving your fellow man can you truly appreciate being on the board.
LEARN FROM THE PAST – LEARN FOR THE FUTURE
In closing, talk to the experts in the industry. These individuals have lived through many of the scenarios you are about to experience. They can guide, advise, and educate. Some are even willing to provide on-site or online education and training for your board. Take advantage of it. It will make your life on the board easier and more enjoyable, knowing the solutions to many common situations. Work with and learn from these specialists and your crash course for board members will become a short course in success. Having served on various boards for the last 40 years, I can tell you it is definitely hard work, but in the end I can assure you it is a gratifying and a rewarding experience. Enjoy.
Helping You Build a Firm Financial Foundation For Your Future
Nico F. March is the Managing Director for The March Group, LLC. He has worked with Community Associations since 1974 and has served on several Boards, including the Board of Directors for the Community Association Institute (CAI), San Diego Chapter. His team has specialized in Corporate Cash and Association Financial Management since 1982 and has assisted over 1000 Associations, Nonprofits and Timeshares invest over $4 Billion in reserve, operating and reconstruction funds. Nico and his team work out of their San Diego and Wyoming offices and may be reached at 888.811.6501 or email [email protected] for further information and consultations.
The March Group is not a tax or legal advisor. We will be glad to work with your professional CPA and Attorney to help you with your financial goals. Neither the information contained herein nor any opinion expressed shall be construed to constitute an offer to sell or a solicitation to buy any securities mentioned herein. Securities offered through LPL Financial, Member FINRA/SIPC.
Content in this material is for general information only and is not intended to provide specific advice or recommendations for any individual.