Every board is different

There are approximately 10,000 condos in Ontario and they need about 50,000 directors to assume control and direct the management, finances and operations of a $30 million to $200 million dollar property with a cash flow of anywhere from $10,000 to $500,000 a month for absolutely no pay or compensation.

So where do these condos find their directors? From within the ranks of the owners that make up the corporation, that's where.

Standards
Condo corporations are not like a multi-national corporation's branch plants or fast-food franchises where a single headquarters sets the standards that every location, no matter how remote, must follow. There is no performance standards set by government or industry.
 
Some boards have high standards, for themselves, and for everyone that works for the corporation and they expect the property management company, the superintendents and all contractors to meet those high standards.

Other boards don't aim so high. When they pick contractors, the cheapest price is rated far higher than the quality of the work.

However, cheap is seldom good and cheap usually fails to give enduring value.

Education & experience
Condominiums and co-ops are among the few corporations left in our society where a candidate requires no prior experience, faces no educational barriers or required qualifications to become a director of a privately owned multi-million dollar non-profit corporation.

A condominium corporation consists of the building(s), property, machinery, amenities and is home to anywhere from a dozen to several thousand people.

However, it would be ideal if a condominium board had directors who have experience in:
• human resources or labour relations
• accounting or budgeting
• purchasing
• supervision or management
• building trades or engineering
• negotiating contracts

Obviously this can be hard to achieve. Yet there are condos that have boards where collectively, the directors have these skills and perform their duties with skill and diligence that is truly remarkable.

So if new directors are elected and they do not have skills in any of these areas, they can do one of three things:

1.	Take educational courses, read the condo's documents, books and magazines and learn from the other directors until they get up to speed.
2.	Rely on the other directors to carry the load.
3.	Download their responsibilities onto the property management company.

The talent pool
If a condo is made up with a large percentage of resident-owners that have business or public sector management experience, or are university educated and have worked for large organizations, then the board has a large pool of talented individuals that can competently run a condo corporation.

Local union shop stewards and executive members, charity volunteers, small business owners, political party activists and business supervisors have experience working on committees and making decisions. All of these people have talents that condo boards need.

A district manager for a large property management company told me that he had concerns about managing a new CityPlace condo. It was populated mainly by young renters and resident-owners who loved to party hard.

Yet, the board was made up of university graduates, two of which had their MBAs, so the building was well managed and the board was asking the right questions and making good decisions.

However, if a condo has a large portion of absentee-owners and/or if the majority of owner-residents have lower incomes, are not as well educated or don't have management experience, then it can be very difficult to find competent candidates to run for the board of directors.

Recruiting
In a smaller condo, where volunteers are hard to find, the directors should talk to all the new owner-residents and if they have skills and experience that are needed on the board they should be invited to run for any vacancies that are opening up on the board.

This is one way a competent board can renew itself.

Competence
A board that has competent directors who have confidence in their abilities is easy to spot. The president chairs the board meeting and the AGMs. (The corporation lawyer does not attend the AGMs so the corporation saves a lot of money.)

Perhaps a professional minute taker attends the AGMs but the secretary takes the minutes of the board meetings.

The treasurer works with the manager to draft the annual budgets and the directors closely review the monthly financial statements at the board meetings.

If there is a Director of Operations, then that director actually knows something abut the building structure, the machinery rooms, the boilers, the chillers, the risers, how to turn off a leaking water pipe and reset the fire alarm panel.

Management by objectives
The directors give management a set of measurable objectives and reviews these objectives with the manager at the monthly board meetings.

These objectives will vary from corporation to corporation but they could include targets for:

•	the year-to-date budget.
•	safety related incidents.
•	housekeeping targets.
•	cost savings.
•	incidents & costs of vandalism.
•	security occurrences.
•	elevator downtime & entrapments.
•	number of complaints from residents.
•	receivables.
•	lost discounts due to late payments.

Sloth
A board that is less willing—or able—to put in the time to learn their duties, has the manager, superintendents or contractors do all of this for them.

I talk with minority directors at other condos and they tell me that the property manager sets the agenda for the board meetings, effectively chairs the meeting and handles all the correspondence and monthly financial statements.

The five board members act as unquestioning cheerleaders.

When I ask them if the directors were replaced by five stuffed animals would there be any noticeable difference, they answer that the results would be about the same but the meetings would be a lot shorter.

Due diligence
There are boards where the directors assign duties to the management company and hire contractors to do various jobs on the property. When the jobs are complete, the directors then conduct spot checks on the work to insure that it appears to have been properly done.

For example, at my condo, several units had windows with defective seals. It took only one conversation with the manager to have our unit added to the list of units that needed replacement windows. Less than two weeks later, a contractor came in to inspect our windows and submit a bid. The following week, a second contractor inspected our windows in order to submit a second bid. Our board wanted to insure we would pay a fair price.

A few days later, a director, who is a retired engineer, came to our unit with the property manager to see what windows were being replaced to insure that the work order submitted was accurate and that the windows had to be replaced.

At another condo I know of, when there was a water leak in an utility room, the manager phoned a plumber, told him where the problem was and a couple of days later the plumber said he fixed the leak. A bill was submitted and paid.

No one, not the manager nor any of the directors, checked on the leak or on the size of the problem either before the plumber was called or afterwards. This happens all the time.

Every board is different.

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