“You have to know what the really important decisions are and make sure you invest in getting them right.” – Tim Reed
As Board members of homeowners Associations, that couldn’t be a truer statement!
Almost every decision that the Board of Directors make has a financial impact on the Association. Lots of Board members struggle with how to know if they are making the right decision – and what if the wrong decision is made.
There are some Boards that have operated for years without making significant decisions out of fear of making a wrong decision. This is sometimes based on previous decisions that were made that adversely affected the Association.
This quote by Tim Reed is a good, simple rule of thumb that if put into practice, can help Board members be confident in their decision making process.
Know what the important decisions are. What are the important issues in your Association right now? Are they related to rule making and governance? Deciding to move forward on a large maintenance project?
Whatever the issue, the Board as a whole should be focused on understanding the importance of the decisions necessary, and not be side-tracked by the lessor issues that can sometimes arise. (For example, the issue of deciding on whether or not a Holiday event should be planned and budgeted for, and getting ‘stuck’ on a discussion of what color the plates and napkins should be – without deciding on whether to actually plan the event or not).
Staying on track will help all Board members continue to operate in the appropriate capacity necessary for good decision-making and not be ‘chasing rabbit trails’ during meetings.
Invest in getting them right. The word here is ‘invest’. As volunteers in the community, Board members invest a significant amount of time and energy into their communities, and are some of the busiest individuals I know. However, part of the responsibility of Board service is to make sure Board members are adhering to the Business Judgment Rule.
An aspect of compliance to the Rule is investing time and resource where necessary to understand all sides of the issues requiring an important decision, so that the best decision possible for the Association can be made. This should be thought of as an investment into the knowledge base for your community – not as another item on the ‘to-do’ list.
Committees can be a useful tool in helping Board members with research on important topics. If your Association is not tapping into the invaluable resource of your Association’s members through committees – consider doing so.
Your Associations’ community manager, vendors and legal counsel are available as industry professionals to assist in the process, and can provide direction for necessary resources.
Being confident in making good decisions for your community is possible with Board member understanding and investment. Your Association’s health and financial stability are depending on it.
Got a question regarding decision-making and governance issues? Contact a Bentley Team member!
Quote from the article: http://www.smh.com.au/small-business/managing/the-five-deadly-sins-of-leadership-20150816-gj0gak.html#ixzz3kG7wCBsb