Board members come in all shapes and sizes—literally and figuratively. In some buildings, no one wants the hassle of working a thankless job for no compensation, and the same four people are guilted into the job every year by default. In other buildings, a board membership is a badge of honor, carrying great cachet, and residents vie for the privilege. Some boards are honeycombed with inveterate presidents and treasurers unequipped to change with the times. Others feature young professionals—accountants, lawyers, hedge fund managers, and the like—whose skill sets dovetail nicely with the job description.
What do they have in common? When they start, with rare exception, they lack the requisite knowledge to effectively do the job. And in most cases, they have no idea what they're getting themselves into.
"I was a board president for eight years," says Herb Rose, president of Herb Rose Consulting in Manhattan. "We were always dealing with subjects we knew nothing about."
So a member of a co-op or a condo runs for a board position for the first time and gets elected. Now what? "Sell!" jokes Irwin H. Cohen, president of A. Michael Tyler Realty in Manhattan, "and move to Boise, Idaho!"
In all seriousness, there is a wealth of resources out there for new, inexperienced board members (and for board members with decades of service, for that matter). It's just a matter of knowing where to look. So what's out there? What are some tips on how a new board member can hit the ground running? What can existing board members do to ease the transition?
Common Board Blunders
There are a few common traps that new board members fall into. The first is what we'll call the "activist mindset."
"The number-one problem I've had, in my years of experience with new board members, is that they generally have a single issue that's burning them," says Rose. "It might be the color of paint in the lobby, or what to plant outside. What they need to realize is that dozens of things take priority over the thing they came in with."
Sometimes these activists are able to effect the change they seek—they get the hideous puke-green lobby redone in one of those pleasant Pottery Barn colors—but then, once their sole mission is completed, more often than not they tune out.
"I was treasurer for 12 years," says Rose. "A new board member came in—and all she was interested in was recycling. She was useless."
"The cost of running a co-op only has discretionary expenses of 20 to 25 percent of the budget," Rose says. "The rest of the budget is mandatory. I had a new board member come in, and he said, 'I want to cut spending by 10 percent.' And I said, 'Are you planning to run the building cold all winter?'"
As treasurer, Rose had an effective method of dealing with quixotic new activist board members. "I ask one question: how are you going to pay for this?" he says. "That usually got rid of the nonsense."
In another pratfall, new board members can overestimate their own intelligence and/or expertise. Running a co-op is like running a million-dollar business, after all, which is not something most of us have experience doing.
"Many board members are not qualified to be board members," says Mona Shyman, vice president of the Federation of New York Housing Cooperatives & Condominiums (FNYHC). "On my board we have two PhDs. One of them, he's a very bright guy—he soaks up what I tell him like a sponge—but what does he know about running a building?"
Getting Up to Speed
Even serving as a board president for years doesn't guarantee success in this regard.
If even experienced board members don't know it all, how can a newbie hope to catch up? Fortunately, there are a lot of resources out there—starting with the professionals employed by the co-op.
"The board is like the president, and the attorneys, accountants and managing agent are like the cabinet," says Cohen. "Boards have to learn how to get the information and make decisions. All the resources are there—it's just a matter of using them."
The building's professionals, as Cohen suggests, are a wealth of information just waiting to be tapped.
"If I got a bill for certain plumbing items," Shyman says, recalling her nine years as board treasurer, "I had no idea what they should cost—I went to management and asked them."
Other professionals should be utilized as well.
"If there's a major project in the works," Rose says, "the first thing a board should do is get an engineer who is an expert, and pay him or her to give you specs, so you know what you have to do."
Many boards make the mistake of undertaking a $200,000 project without first spending $2,000 on an engineer to help them start up, with disastrous results.
"Always get expert advice," says Rose. "Don't be fooled into thinking you have the experience, because you don't know."
Know Where to Look
The problem doesn't end with simply not knowing.
"You don't know what you don't know," says Cohen, "and you don't know where to find it."
So how to begin? First, say the experts, read everything.
"Become familiar with the governing documents," says Cohen. "The offering plan, the bylaws, the proprietary lease. Read the certificate of incorporation—a lot of people don't do that. Then read the minutes of the board meetings for the past couple of years—provided by my [managing agent's] office or the secretary of the co-op. This way, you can hit the pavement running."
Another good thing to pore over, needless to say, is The Cooperator—which archives are available on the website for easy reference. If you want to know about, say, signage, you can pull a piece I wrote recently on that subject.
But reading only goes so far. "Have you ever tried to fix a computer using a manual?" asks Rose. "There's 50 things in there, you only need two—and you don't know what they are."
Another excellent resource is the Council of New York Cooperatives & Condominiums (CNYC), a not-for-profit membership organization for area housing cooperatives and condominiums. The organization offers e-mail lists, online newsletters, special events and workshops, an annual housing conference, and even its own cable television program. Mary Ann Rothman, the CNYC's executive director, is herself a great resource.
"No one knows more about the co-op industry than she does," says Rose. "That's the encyclopedia."
The Federation of New York Housing Cooperatives & Condominiums (FNYHC) is another excellent resource. Its mission includes educating of board members, offering publications on cooperative and condominium housing topics, and monitoring court decisions and local, state and federal legislation affecting housing cooperatives and condominiums. The Federation also offers a variety of useful seminars and workshops.
The New York Association of Realty Managers (NYARM)—dedicated to raising the standard of excellence for real estate and property management professionals through education, information, legislative initiatives and a peer network—also sponsors a trade show. And the Steven L. Newman Real Estate Institute at Baruch College is offering a class for board members in the fall.
"Go to seminars like the ones the Federation does," Shyman advises. "Go to trade shows—The Cooperator has a trade show. [Editor's Note: the 22nd Annual Co-op & Condo Expo is April 7, 2009] There are many avenues open if you take advantage of them."
"You must learn what makes the animal work," says Rose. "How many legs has it got? What does it eat?"
Above all, don't be daunted. It is no walk in the park, serving on the board. It's a thankless, often glamorless job whose rewards, while many, do not take the form of legal tender. But if you're willing and eager to do the job, there is plenty of help available.
Greg Olear is a freelance writer, editor and frequent contributor to The Cooperator.