Co-op boards make decisions for the good of all shareholders, not just one or two. Though board membership may be a selfless proposition, productivity results from a concerted effort to put duty first, with personal conflicts and interpersonal friction taking a backseat to business. According to Bud Johnson, a thirty-year shareholder resident and board president of Manhattan's Chesapeake Owners Corp. co-op, "To me, being on a co-op board is like running a corporation. All of us on the board are running a business. We're spending the money of the shareholders. We have to run it on a profitable basis."
Meetings are the best time to transact important co-op business, so time spent picking through grievances and unstructured chatting wastes valuable time that would be better spent focusing on getting things done. A proper meeting actively includes board members, the manager, and - when requested - the co-op's attorney.
Boards often derail themselves through simple lack of structure. Johnson points to how his board divides duties based on professional skills - financial skills for the treasurer, someone with human resource skills for the interview committee, and so forth.
Stanley Dreyer, a senior partner with Gallet Dreyer & Berkey LLP in Manhattan, suggests a different approach - bringing in an outside third party expert to advise the board. "I think that what your expertise is when you walk into that board room, you're a shareholder. And that goes when you vote for the maintenance charge, you don't vote your own pocket, you vote for the benefit of the corporation.
"I'd much prefer not to use the professional expertise of a member of the board for solving a corporate problem," says Dreyer. "No matter how good, I don't like architects [who live in the building] designing lobby plans, etc. Bring in somebody else, pay the fee, and you're away from it all. Bring in an expert and get the expert's opinion, decide whether it's appropriate, move ahead, and you're going to be sustained by every court in this jurisdiction. Don't try to undertake the project by yourself"¦generally, I can tell you I've never met a board member who was an elevator engineer, who was a heating contractor, or who knew anything about some of the problems we're faced with. When in doubt, bring in a third party."
Dreyer, though, says he would welcome having a board member with expertise involved in the process of selecting a third party vendor or outside professional. "I would prefer a pristine situation. Yes, you want to have a shareholder in the building who has the expertise as an architect or a heating engineer come in and help you interview the third party from the outside. That doesn't bother me. But I want to have someone totally unrelated to the co-op. People today are litigious."
Herb Rose, president of Manhattan's Herb Rose Consulting, says that despite the fact that board members are voting on questions which affect them just as directly as non-board shareholders, their fiduciary duty precludes them from voting strictly for self-interests. "I've never come upon a situation where the facts of that situation were too difficult to solve," says Rose. He points to different issues that spark controversy: "For various personal reasons, people get very involved emotionally - and you have to go over [those issues] in greater detail. Although it isn't one of your bigger problems, you'd get people willing to commit murder for parking."
Robert G. Fonti of Vincent James Management, a property manager in Manhattan, goes further in saying that it is therapeutic to provide an outline of how co-op work may be delegated for smoother operation. "Many boards don't have this structure, so we have to build it," he says. He stresses that without organization, not only is necessary energy diverted from co-op concerns, but time is also wasted arguing personal issues. "There is too much acrimony, too much discussion, too much personal stuff," says Fonti. "Time is a commodity that shouldn't be wasted. Boards that don't work are not listening."
John R. Janangelo, president of Bellmarc Property Management in Manhattan, describes boards who do their best to act in the best interest of their co-op, but whose efforts are consistently frustrated by individuals who are perpetually unreasonable. Most board members' willingness to be team players ends when their every suggestion is struck down in meetings. "What'll happen is that everyone will get to have a vote," says Janangelo. "There's usually someone who's successful in getting something passed or defeated. There are people who don't accept "˜no' for an answer, who press their issue. But, I still think the issue is that your home is an emotional thing." And, according to Janangelo and others, that emotional attachment doesn't always inspire the best - or the smartest - behavior. Paul Gottsegen, director of Manhattan's Halstead Management Company, has some advice for boards mired in tug-of-wars that have gotten personal; "The one trick that I tell people at a board meeting is, "˜Don't speak to each other. Speak to the motion'. Don't have a debate between individuals. Just debate the motion."
The most effective, efficient meetings, says Joseph G. Colbert, a partner with the Manhattan law firm of Rosen & Livingston, begin with a review of topics and move through an agenda set in advance by the manager and board president. The board president functions as master of ceremonies; keeping members to the agenda, facilitating debate, and reining in members who would dominate the discussion. As essential skills, adherence to structure and clear, concise communication are not always cultivated by all board members, so it may be helpful to bring in a professional consultant or conflict mediators to organize a board and replace personality conflict with productive communication. A professional mediator may model more efficient meeting strategies to show how simple things - like listening to others - can prevent some board members from feeling that their ideas are unappreciated among fellow members.
Fonti says, "Listening is 90 percent of it - be a good listener. Sometimes [a board member] can't come out with the words "˜I don't like this or that'. It might take them 45 minutes to get to that." He describes easing tensions in a troubled board by moving the entire daylong meeting out of the building and into neutral territory - a kind of group retreat. "I asked board members to come to the meeting with bulleted ideas," says Fonti, "And we [took] them out of the building and to breakfast, lunch and dinner. Once we got them out of there, it was a learning process. We had a lot of work to do. We had to give minutes books, policies and procedures, collated all together. It all comes down to structure - the major problem we have with boards is a lack of knowledge of what their jobs are in the bylaws, [and] of what they can and can't do."
The board retreat, Fonti says, included not only assigning official roles, but also forming committees to oversee building finances, maintenance, interviews, and capital improvements. The group also worked to recognize and separate true concerns from superfluous arguments. At the retreat, each board member met with a member of the consulting team to give the director a chance to express ideas and opinions without competition. The group also did exercises designed to promote listening to fellow directors - an invaluable skill in achieving successful board meetings.
According to Gottsegen, "It's important that the board make a decision, [and that] the board members go with the majority. Divisiveness is the worst thing - I believe in healthy debate, but once the debate has happened, a decision should be reached. There must be a resolution and a conclusion to the debate. I believe most board members are good, nice people who really care about their building. Someone feels the flowers should be this way and another person feels the flowers should be that way. If four out of seven people feel the flowers should be replaced weekly by an outside company, versus the other three people who feel it should be a one-time fake arrangement, it should be debated. It should be decided, and everyone should move on. The three people who lose should be willing to say, "˜Okay, I lost. Forget it.' That's usually where you get hung up."
The bottom line, according to Johnson, is that "You'd better run a profitable business, because you're affecting the lives of a lot of people - and they're your neighbors." It's that person-to-person dynamic that makes serving on a board so rewarding - and so frustrating sometimes. Rose cautions that a seamless blend of personalities and professionalism may not be possible "In a perfect world, it's possible. I don't think it's possible in this world." Whether that's the case or not in your building, with a healthy dose of fairness and an eye for the equitable exchange of ideas during your all-important meetings, you may be able to come close.