Minority directors

In theory the board, consisting of five volunteer-owners, works as a team meeting once a month to review the manager's performance, check the financial statements, deal with current issues and plan future expenditures.

Issues are raised at the board meetings, are debated and are voted on once everyone has their say. If there is disagreement on an issue, the decision may be put off until the next meeting so more information can be collected.

Having five equal decision-makers is suppose to give the board the checks and balances it requires to make sound decisions.

Reality can be far, far different.

A rogue director
There are ghastly people who get elected to condo boards and they really are a fright. No doubt boards would be far better off if they could be dumped.

Perhaps a director wants the corporation to hire her relatives or friends. Perhaps she wants to roll back the condo fees and doesn't want to maintain the building or adequately fund the reserves. Perhaps he just likes to argue and be obstinate.

This director may tell other owners which units are in arrears, may boss the cleaners around or may yell and swear during the board meetings.

In these cases, the majority has good cause to be alarmed.

It should be obvious that I am not sticking up for these kind of rogues.

However, it is just as likely that the new directors have legitimate concerns on how the corporation has been managed. It is these minority directors that I am concerned about.

Split on the board
From time to time, one or two new directors may be elected to the board. If one or both of them questions motions, or want changes, the majority may resist.

The new board members may want to see the financial records and the contracts that the condo has entered into with suppliers and contractors. They may also want to see the board meeting minutes where the important decisions were made. They may want three quotes before awarding contracts.

This may not go over well with the majority of directors and the property manager.

The majority rules
The power resides with the simple majority on the board, usually three out of five board members. The three can simply out-vote the other two directors and  have their way. However, constantly having to justify decisions or listening to different opinions can get tiring.

How decisions get made
If the majority is questioned too much at the board meetings, they will meet with the manager, either in person or more likely by e-mail, and decide how they will vote ahead of the board meetings. Then they used the full board to ratify decisions that they already made.

In some condos, the majority of the directors hold board meetings without inviting the dissident directors. The dissidents hear about the decisions later, after they have been implemented.

Relations get toxic
Either the minority gives up battling with the majority and starts "going with the flow", they stay silent during the meetings, they resign their positions or the board meetings start getting toxic.

If a "rogue" director continues to dig for information, she may be accused of interfering with management. There have been incidents where a director has been barred from the management office under threat of being charged with trespassing and of the president refusing to allow a director to examine the corporation's records.

Keeping the dissidents in line
The boards can use a confidentiality agreement to keep the owners from learning that there is a rift in the board and to prevent the minority directors from telling the owners what the board is up to.


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