The Board/Manager Team Mindy Eisenberg, CPA

Much has been written recently about the management industry indictments, the role of the

managing agent and how to monitor management. Little has been said, however, about what it takes to make a board/manager relationship work. The managing agent and board of directors are a team working together to operate the building in the most efficient, yet highest quality manner possible. Like any team, they must rely on one another and know what the other needs and expects in order to work effectively.

There are many ways to improve or enhance the board/manager relationship. Start by putting in writing what you expect of your managing agent and what is expected of the board, in order to avoid any future misunderstandings. By instituting a specific policy for how information will be gathered and passed on to the agent, as well as regular performance reviews and meetings, boards can be sure they're working with, not against, the agent they've chosen.

Put Expectations in Writing

The best time to establish a good working relationship with your management firm is at the very beginning. But it is never too late to delineate, in writing, how the two groups intend to work together. While the management company has a responsibility to help set realistic goals and timetables, the board, in turn, must have realistic expectations. The board should know the basics about the site agent's obligations: How many properties is he or she managing? How often will there be a site visit, including a complete walk-through of the property? How many meetings a month will management attend? Who at the company will be fielding shareholder complaints and what is the policy and procedure for acting upon them?

Knowing the answers to these questions will give the board a better understanding of what can be expected from the man-aging agent hired. The answers should be put into writing and perhaps become part of the management contract when it is time to hire a new firm or renegotiate the existing contract. If the reality does not meet the written expectations, then management needs to be told. It should also be noted that if the board of directors is not doing its share, they're only hurting themselves. Managing agents should not and cannot be expected to handle everything alone. With these considerations agreed upon, the board can have clear expectations and plan accordingly.

Developing an Action Plan

The board's role is to set policy and make decisions (with input from management) which management must then implement. Very often directions are confusing. Several board members may call the management office giving directives that are conflicting. Discussions may be heard at a board meeting for hours, but no clear policy is set or action plan put into place.

Boards must end each meeting with a specific set of goals and action plans for tasks to be performed, deadlines for their completion, and a written list of who is responsible for what. Deadlines must be realistic, taking into consideration the resources that are necessary, the time of year, and outside vendors that will be involved. Assignment of tasks must be realistic as well. Too often a particular person, be it a board member or agent, commits to doing much more than can be reasonably accomplished in the given time period. Be sure to break big projects into ffb smaller steps so that progress is made between meetings and pieces of the project can be assigned to different individuals.

With a board that has its thoughts and concerns organized and written down, the managing agent will have a fuller grasp of what must be done. Management can then take responsibility for projects that are realistic and not just have work assigned to them.

Institutional Memory

Only by having clear written policies and procedures can the board expect management to effectively carry out their wishes. If your board does not have a procedures manual, it would be a worthwhile investment to create one. Board member training should also be considered as a way to reduce time spent at board meetings and avoid reinventing the wheel every time there is a changeover on the board. Many boards discuss the same issues year in and year out with no resolution, or new members of the board revisit old issues time and again.

And remember: the minutes of each meeting are part of the institutional memory of the organization. Minutes, which should include board policies and decisions, must be taken at every meeting and reviewed for accuracy at the next.

The importance of having management attend all board meetings cannot be understated. The only way for management to stay current on building problems and advise the entire board in a timely manner is if regular meetings are conducted between the two groups. All members of the board/manager team can then hear the same progress report and have a chance to give input into decisions.

Problem Resolution

When dissatisfaction surfaces, it's important to have an in-house policy for handling conflict. Don't let unhappiness stew under the surface and remain unresolved. Some cooperatives have complained about their managing agent for years without ever having a face-to-face meeting or shopping for a new agent. As with any relationship, the best approach is to speak or write directly to the person who can resolve the conflict; if the individual involved does not know there is a problem there is not going to be a resolution. The discussion of complaints should not be hostile or accusatory, but rather a frank discussion about dissatisfaction and how it can be corrected. Management companies fight hard to get new business and they will be willing to accommodate the board's needs if the requests are reasonable.

Don't assume the management company cannot solve a personality conflict with one agent. Perhaps a change in agents would set the situation right. The management company would need clear input on the problem and should be given the opportunity to resolve the situation.

When it comes to handling problems and complaints within the building, establish whoboth in the building and at the management firmwill receive complaints and how they will be acted upon. Establish the system, try it out and make adjustments. In areas of high conflict, like pets or parking, boards may need to create a special system or assign one individual to handle those complaints and resolve conflicts.

If the doorman, superintendent or concierge is the recipient of complaints, set up a system whereby they can pass the information along to the person responsible for solving the problem. When problems arise, information should be gathered as to what the exact problem is and how it can be solved. Make sure that a log of complaints is compiled and the person making the complaint knows what action is being taken.

Board members and managers should look upon themselves as a team, working for the betterment of the building. With a clear understanding of their responsibilities and a positive strategy for dealing with each other, all members of the team can be assured they're doing the best possible job for residents and themselves. The relationship between the board and managing agent is one that hinges on the active participation of both parties. The board needs to take responsibility for their part in the team and not put the entire burden on management.

Ms. Eise 8b5 nberg is a partner in the accounting firm of Eisenberg & Krauskopf and founder of the Council of Westchester Cooperatives and Condominiums.

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