“Luck is always the last refuge of laziness and incompetence.
—James Cash Penney

“Man cannot live by incompetence alone.
—Charlotte Whitton

Owners should not accuse their board of directors of dishonesty until incompetence and sloth has been completely ruled out. Take a look at these examples:

One Etobicoke condo board hired the low-cost bidder to replace worn-out hallway carpets. After handing the man a $25,000 cheque, the down payment, he disappeared—never to be seen again.

Another board, out in Scarborough, hired a low-cost contractor to work on the building’s HVAC system. The guy, who was found on Craigslist, was incompetent so qualified tradesmen had to be hired to fix the first
contractor’s work.

A condo board in the west end hired an owner to paint a party room and a hallway. He does a sloppy job so they hire a different owner to repair the earlier work and complete the job. After starting the job and receiving his cheque, this owner becomes ill so the job languishes.

The job needed to get finished so one board member asks a third owner to take a stab at it while the property manager goes about hiring a professional contractor.

Were these boards crooked? Of course not; they were incompetent.

Questionable choices
A condo that received a city work order to fix a leaking parking garage that needed $9,000,000 to repair, diverted $400,000 out of their deeply underfunded reserve fund to buy new hallway carpeting.

That just didn’t make much sense. (Unless the owners who were selling their units wanted their corridors to look better.)

Dumb? But too dumb to know it

A sign at a Toronto grocery store

For more than a decade, David Dunning, a psychologist at Cornell University, has found in his research that it’s “intrinsically difficult to get a sense of what we don’t know.” It turns out that incompetent people are too incompetent to recognize their own incompetence.

For instance, many people don’t have training in science, and so they may very well misunderstand science. But because they don’t have the knowledge to evaluate it, they don’t realize how off their evaluations might be. This is why many people doubt the existence of global warming.

Most directors make decisions based on very limited knowledge. How many of the estimated 50,000 plus directors in Ontario understand accounting, the building trades, HVAC and plumbing systems, building envelopes, elevators, deteriorating concrete, labour relations, how to negotiate contracts and the many other duties that the board of directors needs to make decisions on?

So a board needs individuals who can hire management, contractors and professionals that will give them good advice and must catch on when they are being poorly advised.

“It's not denial. I'm just selective about the reality I accept.
—Bill Watterson

Denial in its broadest sense means refusing to acknowledge painful or overwhelming external circumstances, avoiding the facts or minimizing the consequences. Denial is a common response to a stressful situation and it can be an important coping and defense mechanism.

Denial—or even healthy skepticism—can help people withhold judgment until all the facts are in. Gradually adjusting to major changes can lead to better decisions in the long run. This gradual adjustment is referred to as an adaptive response.

But denial can delay appropriate responses to circumstances that require timely action and change. It is important that the boards face reality so they can make the tough decisions that need to be made.

When one west-end condo had a leaky roof, the manager said that they needed $600,000 to replace the roof. The directors freaked out as they didn't want to raise the fees. Instead, they went with a discount contractor who said that he could patch it, and it would be as good as new, for a quarter of the price. A year later, after the repairs were done and paid for, the roof still leaked.

Once again, the board is not corrupt; they are just trying to find a bargain.

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