Page 8 - CooperatorNews New Jersey Summer 2021

8 COOPERATORNEWS NEW JERSEY
—SUMMER 2021
NJ.COOPERATORNEWS.COM
BOARD OPERATIONS
Board Style and Management
Hands-on vs. Hands-off
BY COOPER SMITH
continued on page 12
Condos and co-ops are unique in their
management structure, of which there are
two levels: the board of the association or
corporation, which governs the community
on behalf of the unit owners or sharehold-
ers, and a hired management agent, who
conducts the day-to-day affairs of the prop-
erty. Of course, some communities go their
own way and choose to self-manage, but they
are the exception to the rule—particularly in
communities larger than 20 units.
The question is, in professionally man-
aged multifamily communities, how much
responsibility and authority does a board del-
egate to outside management, and how does
that affect how a given community functions?
The Spectrum
While each and every board is different
and has its own style, managers report there is
a ‘spectrum’ to board styles that ranges from
minutely to barely involved. “There are two
kinds of boards,” says Dan Wollman, CEO
of management firm Gumley Haft in New
York City. “They can be autocratic and dic-
tatorial, or collaborative. In my experience,
more are autocratic—and that has to do with
the fact that most owners are ambivalent and
apathetic. They don’t actually want to on
be
the board, which effectively leaves one or
two active, engaged people on the board to
run the building. This is very common. It’s
simply the more pervasive style. Personally,
I prefer a collaborative board, one that wants
to be there. Collaboration allows for every-
one to give an opinion and make a consensus
decision, even if it’s not the one I personally
recommend. I also like a ‘big-picture’ board—
one that’s involved, but not bogged down with
minutia. A board should never spend an hour
discussing what type of cut flowers should be
placed in the lobby. I want them to see where
we are spending their money for a big project.
It’s important that they see and feel where the
money is spent. It gives them a far better per-
spective when they talk to shareholders—and
that’s extremely valuable.”
Bryan Hughes, president for New England
for FirstService Residential, says, “This can be
difficult to generalize, as each community—
and each board—has a different flavor. They
are made up of people, so each situation is dif-
ferent.” He divides his boards into three cat-
egories: too engaged, appropriately engaged,
and disengaged.
“For management, disengaged boards may
be easier to deal with on a day-to-day basis,”
says Hughes, “but that isn’t necessarily a good
thing. Although in those communities board
micromanagement isn’t an issue, it’s often dif-
ficult to influence the board to make needful
decisions. This demands extra time from the
manager to educate and re-educate on cir-
cumstances and issues, and often manifests as
deferred maintenance if the budget isn’t prop-
erly funded or the manager isn’t empowered
to take care of the property.”
At the same time, a board that is
too
en-
gaged can make management of the property
difficult. “Part of the fiduciary responsibil-
ity for the board is to oversee management,”
says Hughes, “but this doesn’t take away from
the board’s primary duties to cast vision and
to vote. If they’re
too
involved in the day-to-
day, they lose the perspective that they need
to have to focus on the greater macro-picture
of the property.” Hughes concedes that board
micromanagement is sometimes a reaction to
previous experiences with poor management.
But just as often, “boards are simply over-en-
gaged thanks to members’ control issues, or as
a result of politics within the board creating
fear and anxiety.”
Regardless of a given board’s overall tem-
perament, and even though serving the board
is not a formal paid gig, a little professional-
ism can go a long way. “I worked with a very
professional board in the past,” recalls Janet
Lepson-Sedaka, a property management con-
sultant with Tri-J Properties in Fair Lawn. “It
was a retired group of owners that had been in
the business world for many years. The board
president was a true leader, and knew how to
rein in a new board member who had their
own agenda.
“It’s important from the outset to train
members to look at the bigger picture, and
not at their personal agendas,” Lepson-Sedaka
continues. “They have to learn that the asso-
ciation is an entity to itself that must be cared
for in a fiduciary way and protected from law-
suits. A good board president has the ability
to listen to what other members have to say, as
well as to homeowners.”
Hughes agrees, and adds that an appropri-
ately engaged board is the best balance for the
community and for management. “The board
should be engaged beyond the monthly meet-
ings,” he says, “but not so engaged that they
burn out and can’t review things objectively.
Perhaps some managers prefer the board not
be involved, but we find it’s best when there is
a true partnership.”
In terms of how board style affects his
ability to effectively manage a client property,
Wollman says, “When a board is busy with
minutiae, it’s hard to manage. If we’re discuss-
ing what kind of flowers to put in the lobby
for an hour, we can’t get things done. We don’t
need to discuss flowers for an hour—it’s not
productive. The board should make that deci-
sion without me.”
Micromanaging from the board also short-
circuits a building’s or association’s chain of
command, Wollman adds. “Board members
really shouldn’t involve themselves in manag-
ing the staff,” he says. “They should leave that
to us. Say for instance that a doorman is inap-
propriately dressed. It’s the super’s job to speak
to him. If a board member starts directly dis-
ciplining staff, they undermine management’s
authority, which just makes it harder to run
the building.”
Sometimes a building staff member with
a complaint will find a sympathetic board
member who will listen—which on its face
might not seem problematic, but in reality “of-
ten creates conflict and mucks up the system,”
says Wollman. “The board’s responsibility is to
make policy and procedure; it’s the manager’s
responsibility to carry it out. We institute it.”
Pros & Cons from Both Perspectives
As with a marriage, managers can’t go into
a relationship with an elected board intend-
ing to change it; they have to be prepared and
willing to meet the board where they are, and
work with whatever dynamic presents itself.
According to Hughes, “Part of the role of
the manager and management is to adapt.
But by ‘adapt,’ I don’t mean that the manage-
ment company or manager should change
who they are—but rather that they recognize
what attributes they will need to utilize most
for this particular board and property. Some
of this is skillset, and some of this is personal-
ity. In the end, management also needs to have
the strength to recognize if it just isn’t a good
fit. Sometimes management can just ride out
an antagonistic board, but in an industry with
an ever-shrinking pool of qualified managers,
some of the toxicity levied by boards should
cause management to consider whether a par-
ticular association relationship is doing more