By Alan Rosenberg
A.R. Consulting

y Management/Board Formula:

• the management company gives the Board advice
• the Board makes decisions based on that advice, and other appropriate criteria
• the management company carries out the decisions made by the Board
• the Board, as the executive body responsible to the condominium corporation, monitors the management company’s execution of the Board’s decisions

Management’s Responsibility

The above sequence describes the absolute basic minimum requirement as far as the relationships between the Board and management, management and the corporation, and the Board and the corporation. Does it describe your condominium environment?

Simply put, today’s management industry has established a more than adequate routine of preventive maintenance. And there is a decent understanding of the legislation and the lifestyle. But as often as not, there is a lack of what I’d consider an appropriate response, in general terms, to concerns and inquiries made at the Board level. It too frequently ranges from “leave us alone and let us manage” to outright hostility. (Been there, seen it.)

And I’m allowing for the fact that some Boards tend to micro-manage, which, if taken to extremes, is usually a big mistake. See below, under “The Board’s Responsibility.”

Many years ago, I coined the phrase “Condo Board members face the world’s toughest shareholders – their neighbours.” I say that only because it reflects the most basic principle, in my opinion, of the entire condominium environment. Part of my job is conducting interviews of management companies, in the presence of the Boards, based on questionnaires I’ve designed for the occasion (so as to compare apples to apples).

During one such session, one of the management candidates, a former associate of mine, answered one of the questions by referring to the quotation in question as if it were his own. While imitation is indeed the sincerest form of flattery, both my client Board and I would have been more impressed if these words had indeed reflected his principles, rather than being a collection of “spin” meant to impress a potential client.

If management companies keep the above quotation in mind, they’ll have taken a giant step toward solidifying their relationships with their clientele.

The Board’s Responsibility

My clients are already aware of the seven important facets of the condominium management routine:

• communication
• cost-savings
• operations
• accountability
• safety
• financial and administrative
• resources/expertise

I nag them ad nauseam about this. The most valid application of due diligence is for the Board members to be constantly assessing management according to these seven facets. They will vary in importance from one condominium community to another, but each facet will be of at least some relevance, and that’s how you best assess your management service.

This does not mean micro-management. The phrase “leave us alone and let us manage” is mostly valid. That said, management has to earn their stripes before being left alone to manage. So the Board has to be in a position to assess whether the stripes have been earned. So the Board has to have chosen management wisely, to begin with. Then the Board has to assess initial performance intelligently. Then the Board, using the above-noted seven facets, has to back off a bit, and let management manage. (Notice I didn’t say “leave them alone and let them manage.)”

National Conference - November/03