3 Critical Issues to Cover in Today’s Board Training

Community association board members have had a lot to deal with over the past two years or so, from the pandemic to the fallout of the Surfside tragedy. Comprehensive board training is an essential part of effective risk management — for the association, the board members themselves, and the manager — in such an environment.

“It’s something we’ve always prioritized,” says Katie Anderson, CEO of Aperion Management Group, LLC, which manages around 65 associations in Central Oregon. “I learned really early on that educated board members make better decisions, and, when they understand their responsibilities and the rules, they’re easier to work with. We actually require it in our contract.”

Our experts weigh in on three areas that your training must cover in our current climate.

1. Understanding the Financial Component

Most board members don’t have a financial background, making financial education vital to competent governance. “It’s important for them to understand the reports and financial statements they’re getting on a monthly basis,” Anderson says.

Aperion’s financial training also covers, among other things, how reserve studies work, who has the authority to pay bills and how those processes work, and how budgets are developed.

“As volunteers, they’re not expected to be able to do the accounting, but they need to know, for example, the impacts of not budgeting properly,” says Aaron Goodlock, a partner with the full-service community association law firm Orten Cavanagh Holmes & Hunt, LLC, in Denver, Colo.

“On the flip side, they need to understand the benefits if your association is in strong financial health — how that affects things like special assessments and loan eligibility for both the association and potential buyers. I know of several communities that have recently been denied loans to make significant repairs, based primarily on their financial position and the amount of delinquent fees.”

Managers shouldn’t feel solely responsible for financial training. Think about leaning on the association’s or an outside accountant.

“We use a CPA firm to do training on how to read financial statements,” says Ken Bertolucci, president of NS Management in Skokie, Ill.

“We make sure they how to read them, and then, when there’s a really complicated issue, we’ll get the CPA on a call with the board or the treasurer to explain why the financials are presented in a certain way.”

2. Knowing What Is — and Isn’t — Part of Their Job

Boundary setting can be a neglected facet of board service. For example, board members may be fuzzy on the duties they owe the community.

“Your obligation is to the whole community,” Anderson tells them. “You can’t have self-dealing, you have to disclose conflicts of interest, and you have to work for the good of the association.”

Anderson says board members often don’t grasp that, while they’re on the board, they wear only one hat: “They never get to take off the ‘board member hat’ and put on an ‘owner hat.’”

David Firmin, managing partner with Altitude Community Law, which represents about 2,000 associations across Colorado, is all too familiar with this problem. “Right now, I’m dealing with the concept of fiduciary duty — what it means and what it takes to fulfill your obligations — in three different associations.”

Among other things, Firmin thinks training should specifically address what a board member can and can’t say “out of school” regarding board business. “I have a board member who thinks the board is acting inappropriately so he’s leaking information.”

In addition, Bertolucci says, “boards need to understand the powers they do and don’t have.” Every manager has experience with board members who overstep their authority, but training can reduce the odds of such issues.

“We train them on where their authority comes from, as well as how to determine whether something is an association problem or whether maybe the city or the county can deal with it better,” Anderson says.

“Otherwise, depending on the community, anybody’s whim can become a board problem. We don’t want them taking on something that isn’t their role.”

According to Jamie Dokovna, a shareholder in the Florida law firm Becker & Poliakoff who practices employment law and works with associations, one role board members frequently overlook is that of employer.

“Boards don’t always view their associations as employers even though they are if they have cleaning staff, landscapers, desk people, security, and the like,” she says. “Some don’t have employee handbooks, or they have antiquated handbooks or handbooks repackaged from one of the board member’s old companies.”

Dokovna points out that maintaining a small workforce doesn’t necessarily exempt an employer from employment laws. “When you get to 15 employees, more laws apply,” she says. And some federal and state laws — such as those related to the misclassification of an employee as a contractor — can ensnare even smaller employers.

3. Managing Meetings

Between escalating behavioral flareups and the shift to virtual venues, the landscape for board and general membership meetings has changed dramatically in recent years. Both new and long-tenured board members can benefit from guidance on how to handle the changes.

Structure is key. “Most of our boards use a very simple sort of short-form version of Robert’s Rules of Orders,” Anderson says. “They’re not rigid about it — they tend to adopt the basic frameworks that help them run their meetings.

“We teach them how to call a question and make a motion, when you can have debate, that sort of thing. We use it as an efficiency tool to help them keep their meetings on track and not endlessly debate things.”

At the same time, today’s board members may well have to hold meetings in settings that Robert’s Rules, first published in the 1800s, could never have anticipated.

“COVID has changed many things, and some things are going to change forever, including how meetings are conducted,” Bertolucci says. “Board members need to know to use Zoom — getting comfortable with being on camera and how to use some of the basic features.”

Keep It Going

It’s not unusual for associations and managers to make training a one-time event, generally as new people join the board. Anderson advises going further. “We require all board members to attend at least one training annually,” she says.

So, for example, newbies might attend a session on financial basics, while veterans attend one on conflict resolution or evolving legal issues. “The laws regarding associations become more and more complicated, and boards need to stay up to date,” Bertolucci says.

Experienced board members may grumble about the additional training, but it’s ultimately for their own good.

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