Every co-op shareholder knows that their board president is responsible for making decisions that affect the entire building community—but not as many grasp the amount of responsibility and decision-making that a person undertakes when they become board president.
While the presidents and CEOs of major corporations are usually compensated handsomely for the time and effort they’re expected to devote to their job, a co-op or condo board president is essentially a volunteer who has been elected or appointed to their position. They receive no pay or perks for their work, but must answer to every shareholder for their decisions. If a board president carries out his or her duties competently and efficiently, the building may run so smoothly that few shareholders even trouble themselves to remember the board president’s name. If things are run poorly, however, the president can look forward to building-wide notoriety, and probably some uncomfortable encounters with disgruntled residents in the elevators and lobby.
A Global Approach
But what makes a good board president? The answer is both straightforward and somewhat complex.
“A good board president has the same general qualities of any good board member,” says Herb Rose of the board operations consulting firm Herb Rose Consulting. “They’re someone who has a global attitude toward the workings of their co-op, as opposed to someone who supports issues that are only for their own individual benefit. When you wind up with a board president who is only interested in some narrow thing, for their own particular interest and not necessarily of any interest to the rest of the building, it can be a disaster.”
There’s no standard, universal list of traits that make a person a perfect board president, but there is one thing that most experts agree is most important: leadership.
“A good board president is one who has leadership capabilities,” says Greg Carlson, executive director of the Federation of New York Housing Cooperatives & Condominiums (FNYHC) and a property manager himself. “I do not mean a tyrant, or a dictator. But it must be someone who can try to make the board come to a consensus on a particular item or topic. One who knows how to delegate, and who can time manage.”
A good board president sets the agenda and is a spokesman for their shareholders’ interests during meetings and elsewhere in the community, says Carlson, adding that a board president must always have the interest of the building as a primary goal.
The board president is also expected to oversee—though not necessarily manage—the building’s financial picture. The president must make sure that the money going out and the money coming in is balanced and makes sense. “You can’t go out and spend a million dollars if you only have $50,000 coming in,” says Rose.
Both Carlson and Rose agree that the board president must also guide the board in addressing maintenance problems in a timely fashion. The actual work of bidding out a repair job and coordinating contractors and other professionals will be done by the managing agent, but the board has to understand the problem, the process for fixing it, and both the short- and long-term ramifications for the building.
Unless term limits are written into the bylaws of the community, there are no limits for how long a board president can serve. “The board president is usually elected by the board itself,” Rose says. “All the board members are elected by whatever the documents of the co-op are. They vary a little from one co-op to the other; they can be single-year terms, two-year terms, or staggered elections. Those documents are law.”
In some co-ops, whoever gets the most votes at the annual meeting is named president to avoid internal fighting amongst the board, but as a rule, the shareholders do not specifically elect the board president. How one comes to power is always written in the bylaws. “Most boards that I know usually have an election every year for their board,” Carlson says. “Then, the board usually holds an election [amongst themselves] for the president.”
The one serious drawback to this kind of election is that politically messy or apathetic co-ops will sometimes fail to hold an election according to the plan, and one board will remain in place for years—sometimes a decade or more.
“In some cases, that can go on for 10, 12 years,” says Rose. “A group that really wants to hang on to their power just decides not to have annual meetings and not have elections. It happens. I’ve seen it.”
If you’re a frustrated shareholder in such a building, there are steps you can take to change the status quo. It’s not that hard to force an election in a co-op, contrary to what many shareholders may think. “You don’t need that many shareholders to call a meeting for a purpose of a meeting,” Rose continues. “It is spelled out in the documentation. A lot of times, [stagnant boards] just limp along and these people stay in place because nobody among the shareholders cares.”
Time to Impeach?
An important component of being a good president is understanding how to run a smooth, productive meeting, and having the ability to direct meetings effectively. The president of the board needs to spell out the game plan at the very beginning of each board meeting and make sure all board members are consistent in following the agenda, and have enough time to each board member to offer discussion on an issue.
Nancy Hastings, CMCA/AMS of MAMCO Property Management in Mt. Laurel, New Jersey, has seen her share of board meetings. Hastings warns that an overzealous president can cause as much damage as an unruly board. “Sometimes they can take overseeing the meeting to the extreme,” she says. “They run the meeting, and they insist on sticking to the agenda, but then they don’t give ample time. Sticking to the agenda I think is one of the harder things to do at the meeting, but it’s also important to get things resolved [before moving on].”
Carlson agrees that a board president who perpetually allows meetings to go off on tangents has the markings of a poor leader. After all, it’s just not productive to discuss the lady who always parks her car crookedly for two hours, and then gloss over the important items on the agenda that the board really should be discussing.”If you start talking about the roof, and then a half hour later you are now talking about the trees and bushes without accomplishing anything, it’s not good,” says Carlson.
In addition to letting things get out of control, other things that signify a weak board president is someone who doesn’t focus on the board, bullies them or doesn’t have an open mind about things. The board is a team—a team whose sole purpose is to act for the betterment and preservation of their building, and by extension, their shareholders’ investment. There’s no room on a board for a hardheaded, obstinate president who views the position as an opportunity to throw his or her weight around and run the building like a Medieval fiefdom. Board presidents must realize that when it comes meetings and board decisions, they are only one vote out of many, and their vote is no more valuable than another board member’s. Presidents are not dictators who can browbeat people into thinking along their lines.
The Right Job For You?
You might wonder, with all the stress and potential for conflict, why someone would want to become a board president. Some do it out of concern and care for their building, some want to protect their investment first-hand, and some just like the feeling of being in charge. “A board president offers a little glory, and an exercise of power—it’s really a personality thing,” says Rose. “Some people just need to be in charge.”
But it’s a position that may not be as flashy as one expects. “Most of what goes on with the co-op or condo is very mundane stuff,” Rose says. “Fix plumbing, fix elevator, deal with unions, buy oil, keep it clean, a gang of stuff. It’s not very sexy. So some of these people think they are going to burn up the world by getting on a co-op board, but they really don’t know what the procedures are. You may have to deal with cockroaches more than any other subject.”
What a board president does have to do, however, is maintain good relationships. Hastings says it’s important for a board president to listen to the concerns of the other board members, understand the needs of the residents, and work with the managing agents.
“They really have to work together, and sometimes the managing agent will manipulate the board president in some way for their own benefit. But the better managing agents work with them, so whatever has to be done with the building can be done,” she says.
Board presidents don’t typically get paid for their time, yet they oversee thousands of building dollars. Given that, it’s probably not surprising to note that ethical situations do sometimes arise. For instance, a president could be approached about “helping” someone out—a vendor angling for a sweetheart contract in the building, for example—in exchange for a little favor to the board president. They need to be wary. “A board president is going to be caught in between people who want something, and will offer to make his life easier,” says Carlson. “This is especially true when you are talking about major capital improvement contracts.”
Most board presidents are smart and ethical enough not to get involved in anything shady, such as kickbacks or expensive “gifts” from vendors or contractors, but as various indictments and convictions show, some may be sorely tempted. To offset this, there is usually a system of checks-and-balances in place, just in case. “According to law, a board president can also be a treasurer, but never the secretary,” Rose says. That guarantees another set of eyes and another level of oversight of the board’s activities.
When problems arise in the building, a board president is no more liable than any other board member unless he or she was directly the cause of the problem. Therefore, concern over legal exposure isn’t something that should stop someone from pursuing the post.
Finally, a board president should try and not take things personally when it comes to the board meetings. “These people are not only on the board together but they are neighbors, and they don’t want to create a tenuous situation,” Carlson says. “The board president should not take anything personally because there will be arguments. Leave whatever happens in the room.”