Being selected to serve on the Board of Directors is a great compliment from your neighbors, but it’s also a significant responsibility. In every role on the board, you must act on behalf of all who have appointed you as the decision maker for the community. But, when you consider the various needs, conditions and personalities of every person in the community, even the most capable board members can find it challenging to navigate relationships, keep residents happy and fulfill their fiduciary duty.
That’s why the most successful boards are the ones that operate like a business, approaching each issue with objectivity and making decisions fairly and uniformly. This ensures that all residents are treated equally, which minimizes potential conflicts.
But, if you approach your association like a business, your board should adopt a business plan. Here are five reasons why.
- It helps you bond as a team.
Working with your fellow board members to develop a business plan provides an opportunity to learn what’s most important to one another and a chance to determine how you will approach leading the community together.
- It helps you get organized.
A formal document will provide structure, show the big picture, and help serve as a compass for the board to follow when issues get complicated. When making both major and minor decisions, referencing your business plan will give you the guidance you need to act in accordance with the goals you've set for the community.
- It helps you live out the community's mission and vision.
A mission states the purpose of your HOA and a vision defines your idea of success. Keeping these two parts of the community's philosophy in mind not only help you create the business plan; they make it easier to put them into practice when you follow the plan. This approach ensures that your community mission and vision are always considered as the community’s needs evolve.
- It allows you to set goals and track progress.
The business plan acts as a clear roadmap for the board that can be referenced any time to hold the board accountable, track progress, and identify areas that could be improved. By defining accomplishments and setting additional goals, you prove to your community the value of the work the board is doing and increase their confidence in your leadership.
- It provides transparency.
Often, complaints from homeowners stem from assuming that the board is doing something without their knowledge or unfairly enforcing rules. A business plan creates clarity and gives residents peace of mind that everyone is working towards the same goal: a thriving community.
A business plan isn’t a replacement for your community’s governing documents, which are legal documents that establish how the community must be run, but it’s a useful tool for guiding how the board behaves as they work to ensure compliance with governing documents and continued success managing relationships within the community. The more objectively the board can serve the community, the better outcomes they'll create for homeowners.