Lazy directors


A crooked president and/or treasurer will be a hidden burden for the condo owners to carry—and I say enough about them elsewhere on this website—but a lazy, uninformed board can cause as much damage; maybe more.

30,000 feet

In large corporations, corporate management have to operate at 30,000 feet. This means that they look at the big picture and cannot get bogged down in minor production or quality issues in their dozens of facilities all over the country or in the world.

They look at the bigger numbers and make strategic decisions that affect large divisions. The different levels of managers take the board's directions and implement them down the chain of command.

The problem is when a small condo's directors believe that this is how they should operate. They meet only at the board room, once a month, look at the property manager's reports, review management's proposals and then give their authorization for management to proceed with little oversight.

So little effort
Some boards hold ten meetings a year at an average length of sixty to ninety minutes. That works out to a total of 15 hours a year. (One owner informs me that his board once held a 20 minute Board meeting and the president was proud of that.)

Two hours a month. They spend more time than that watching a single episode of Hockey Night in Canada.

Of course we have to add two hours to the yearly total to account for their attendance at the AGM (where they sit at the front table and say absolutely nothing) and perhaps another six hours or so for emergency board meetings.

Twenty-four hours a year; tops.

So who runs the place?
The manager of course. He or she gets help from the superintendent and the contractors.

Outside of the board meetings, with the exception of the president, who may act like a ten-cent Stalin, the other directors are often invisible.

They don't know the Act, don't know the by-laws and rules and can't analyze the monthly financial reports put in front of them or the audited annual report.

I have been to AGMs where the president and treasurer sign off on the audited financial statements while ignoring such howlers as:

•	financial statements that say that this is a qualified audit when it should say unqualified audit.
•	A $75 million lawsuit against the builder and trades was stated as a $75 billion lawsuit. (1,000 times higher than reality.)

They don't know that they have a couple of abandoned cars in the underground parking lot or which renter constantly parks in the Visitor Parking. What's more,  they don't seem to care.

Then that is it. Job done. Ten short board meetings a year and then they go back to their regular lives.

Isn't that how condo life is sold to owners? Pay one maintenance cheque a month and everything will be done for you?

The cost of sloth
This can be hard to put a total cost due to sloth but some condos give us indications of how pricey this can get.

•	The manager submits three quotes to the board of a condo in cottage company. Two quotes have identical prices and the third is exactly 10% cheaper than the other two. Clear signs of collusion but no director picks up on it.
•	A president suggests the board approve a contractor that has the lowest bid. This contractor is also the president's friend.
•	A manager buys expensive espresso coffee makers. No one can tell where they got to.
•	A board is paying a pest control company for monthly visits. The board thinks the visits are for treating cockroaches. The contract is actually for controlling pigeons, something that has not been a problem for several years. A different company is submitting bills for monthly cockroach inspections.
•	A quick audit of the lockers—monthly rent of $10—shows that a third of the renters are not paying. Lost revenue $1,680 a year.

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