Board Members for Life Pros and Cons of Long Term Service

 It is one of life’s eternal questions: is it possible to have too much of a good thing? That  question certainly can apply to the matter of long-serving board members: those  individuals who get elected and re-elected term after term and have been in  office since the Truman administration. And like most big questions, there is  no easy answer. Every community is different and every board is different.  There are, however, a few pros and cons that tend to crop up in nearly every  situation where a board has one or two long-term members.  

 Accentuating the Positive

 Perhaps the biggest benefit of having a cadre of seasoned board members  overseeing one’s condo or co-op community is the fact that they have unparalleled institutional  memory. “There is definitely a benefit having veteran board members,” says attorney Leonard H. Ritz of the Manhattan-based law firm of Adam Leitman  Bailey, P.C. “Institutional memory can be invaluable. Veteran board members will know why  particular building rules and policies came into effect, how recurring problems  have been dealt with in the past, et cetera.”  

 Steve Greenbaum of the New York-based management firm MGRE agrees. “Long-serving board members really have an understanding of how a board works,  what’s been going on, what needs to get done,” he says. “They are educated. They know the ins and outs of union roles. They understand  payroll and every line item and financial statement. They understand the time  frames of projects and what can get done. These board members know what they’re doing. It’s important to have someone with experience because it can be hard to train new  board members.”  

 Bruce Cholst, an attorney and partner with the Manhattan law firm of Rosen  Livingston & Cholst LLP, not only has worked with long-serving board members, he is one  himself, having just been re-elected to a seventh term in his own Upper East  Side 368-unit complex. “There is no substitute for institutional memory when it comes to board intent on  certain actions that were taken and followed,” he says. Meeting minutes just do not do the job when it comes to painting a  clear picture of the past and while former board members may still be living in  the community, “it’s not the same as being there and being accountable to your fellow board  members.”  

 Nothing, Cholst says, beats actually being on the job. “You gain experience by serving on the board,” he says. “You learn decision making. You get training on technical facets. It takes a long  time to train a person, but by being around for a while, you get a particular  feel for the idiosyncrasies of the building and the shareholders and how they  react to certain things.”  

 And, Cholst adds, you gain a sense of perspective. “You know what’s a red herring and what’s a false alarm versus a real crisis. Not everything is as alarming as it  sounds. A veteran knows what a real crisis is and what is not.”  

 Multi-term board members also are important because they can hold down the  metaphorical fort when new members join the board. In today’s world, running a co-op or condo community can be like running a small  multi-national corporation—the stakes are high with hundreds of units and millions of dollars in play. It  can take up to a full term for new board members to learn the ins and outs of  procedures, bylaws, meeting rules and other details. While they are learning,  the more experienced board members can shoulder the burden and at the same  time, provide important mentoring opportunities.  

 “We really endorse mentoring,” says Greenbaum. His firm encourages the recruitment of associate board members—volunteers who may serve on non-voting committees, for example. They see it as a  way to cultivate interest in volunteering within the community and building a  pool of prospective future board members. “We always like to have associate board members sitting in on board meetings, to  help them understand protocol and how much time they would have to spend as  full board members.”  

 In pragmatic terms, long-serving board members also can help ease whatever  difficulties an association board may have in recruiting new candidates to seek  board positions. Because these positions are voluntary and because they can be  so time-consuming, many residents these days choose not to run for leadership  positions within their condo or co-op community. That means a fair number of  board members may be seeking re-election term after term simply because there  is no one else willing to take up the torch.  

 Some people “run once” and then give up or withdraw because “they don’t want to spend the time they have to or they don’t want to get yelled at,” says Greenbaum.  

 On the Down Side

 Despite the myriad benefits that long-serving board members bring to the table,  there are times when that longevity can be a detriment to the community rather  than a positive. “One down side is when an entrenched board starts acting with a sense of  entitlement, and refuses to institute changes that a majority of owners may  want,” says Ritz. “Or, after many years, they may have gotten lackadaisical about adhering to their  own bylaws, properly monitoring finances, or in a worst case scenario, using  building resources for their own benefit.”  

 “There is a risk that a long serving board member may start feeling self-entitled  or coast, or even become senile and not be capable of making decisions,” Cholst says. In other instances, “a lot of people remain in office because people are apathetic or because they  just like them.” But, he adds, “Complacent people may allow things to crumble.”  

 These instances, though, are rare, acknowledges Greenbaum. “Someone may become apathetic but that’s usually rare,” he says. “Long-term board members are usually committed. They gain the respect of the  shareholders and usually have the respect of a lot of their people. And they  serve because it’s a labor of love. You don’t find them having an agenda. You may see others getting on the board because  they want something specific done—that’s mostly new people. In buildings that are well run with long-term, good  leadership, there’s apathy (among the shareholders or unit owners) because everything is being run  well. In buildings with problems, that’s when new people run.”  

 Breaking the Cycle

 For any co-op or condo community unhappy with a long-serving member of the  board, the easiest solution is simply to vote that person out at the next  election. Sometimes, though, that is easier said than done. Board members  reluctant to let go of power can make it difficult for their fellow residents  to unseat them. And that can be self-perpetuating, until residents begin to  believe that there is no way to vote someone out and so, they simply stop  trying.  

 “If there is dead wood on the board, it can be dealt with at a regular election,” says Cholst. If that solution is not feasible or looks as though it will not  solve the problem soon enough, then “most bylaws have an impeachment process based upon a vote of the shareholders.  There is a removal process. Also, the board members themselves can ease out  their colleagues. But the better way is to let the people decide.”  

 Ritz has seen other methods of avoiding stagnation as well. “I have seen some bylaws that set a limit on the number of consecutive terms that  one person may serve,” he says. “I have also seen a ‘new blood’ provision that requires that every year there be at least one member of the  board who did not serve on the board the prior year.”  

 Changing the Rules

 Just as in federal, state and local governments, the debate on term limits  arises from time to time. As Ritz explains, though, “There are no legal restrictions regarding the number of terms a board member may  serve. Only the building’s bylaws control (that).”  

 Amending those bylaws could happen, theoretically. But it would be extremely  rare and unlikely. “In order to get term limits adapted, you need to amend the bylaws,” says Cholst. And to do that, “you need a super majority of tenancy—either two-thirds or three-quarters, depending on the individual bylaws.” Not only would it be nearly impossible to get that many residents to agree on  such a controversial approach, it also could create a very divisive and  ultimately counter-productive environment within the community, Cholst says.  

 Term limits are “a question of weighing the good versus the bad,” Cholst says. “It’s like throwing the baby out with the bath water. Arbitrary time limits mean  that everybody—those who are dead wood and those who are good—get thrown out.” And ultimately, that could be a destructive turn of events for any community.  

 Perhaps the most effective way to ensure that all board members serve to the  best of their ability—no matter how many times they have been re-elected—is for unit owners and shareholders to be vigilant in their own oversight. By  attending meetings, reading minutes, scanning financials and keeping up with  any and all correspondence coming from the board, residents can help keep their  community on the right track and their board members functioning to the best of  their abilities.  

 And for residents who are dissatisfied with aspects of their community and the  way it is being run, they can make sure they vote in their board elections and  get others to vote as well. Or, they can even take up the baton and run  themselves, bringing fresh perspective and new energy in service to their  fellow residents.  

 “It is a legal requirement that an owner meeting, and board elections, take place  annually,” says Ritz. “Written notice of the meeting must be sent to each owner in advance of the  meeting. The bylaws will establish the timing of giving the notice—typically at least ten, but not more than 60 days prior to the meeting. If a  board has not been holding an annual meeting and election, there are legal  procedures that owners may take to force the election.”  

 Thankfully, the benefits of having committed and long-serving members of the  board seem to far outweigh the cons. There is no doubt that the role of a board  member has gotten increasingly complex and time-consuming in recent decades,  requiring significant energy, skill and experience to be successful. It can be  a difficult load for new board members to bear. That is why boards that have  that institutional memory in the form of long-serving members often flourish,  finding that perfect balance between experience and innovation.       

 Liz Lent is a freelance writer and frequent contributor to The Cooperator.

 

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