As a member of your community’s board of directors, you have a responsibility to educate yourself about the corporation. 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 nine 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 corporation. In general, a condo corporation is a nonprofit organization set up to help run, manage, and maintain a neighbourhood, building, or another collective of homes. People who belong to a condominium pay annual or monthly dues, which the condominium 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 community on behalf of all homeowners.
2. Condominium History
All directors must have a clear understanding of their condominium’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 condominium’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. Provincial and Federal Laws and Local Ordinances
In addition to the condominium’s governing documents, board members should become familiar with standards established by local ordinances and provincial and federal laws. Board members should 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 a mandated Board of Directors Code of Professional Ethics. This code should outline expected behavior regarding integrity and objectivity, technical standards, conflicts of interest, and more. Board members must adhere to the Code of Professional Ethics at all times.
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 community association manager (CAM) or attorney. 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 condominium, 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 ensure sufficient coverage is available under 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. Condominiums can be multi-million-dollar nonprofit 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 the 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.
I’m On the Board. Now What?
Your condominium manager and management company are here to support and guide you along the way.