By David Graf, Moeller Graf
The word “transparency” gets used a lot in the media, the legislature, anti-HOA forums, and at annual meetings. I’ve seen a number of public meetings recently where a few owners have complained about a “lack of communication” from the board to them. In listening to these owners, I have discovered that they feel that their boards have not been proactive in affirmatively pushing out information to them even though they may not have requested information. They feel left out, unheard, or outside of the association loop. The boards that can get the most information to owners at a low-cost and in an interesting manner will, all other things being equal, have the most satisfied residents.
But good communication is only one aspect of transparency. It’s an important one, because if the owners feel unheard, there would be a lack of satisfaction and reduced trust on the part of the membership, no matter how good of a job the board is otherwise doing. But transparency goes far beyond email blasts about relevant community events. It starts with how the board does business.
The corporate model of governance is based upon deliberative action by a group of directors at an open meeting where owners can be present. This is the gold standard for conduct because it is consistent with law, it involves collaboration, and it allows the board members the benefit of hearing different perspectives from the various community members who are in attendance. Regular open meetings of the board are the foundation of good governance.
Of course, Colorado law does not define what a meeting is and is not. Furthermore, the law is unclear about what notice needs to be provided to the owners about upcoming board meetings, and when that notice might be provided. Lastly, the nonprofit act states that unless prohibited by the bylaws, association boards can take action on virtually any association issue by email outside of a meeting. These three features of Colorado law have been abused by a few boards and have fueled public perception that boards are secretive bodies that take action in private.
Here are a few suggestions on how to best increase board’s actions. First, have regular and well-publicized open meetings. Whether this means that notice will be mailed out to the owners before every board meeting or whether there will be one notice of a regular board meeting scheduled for the entire year will depend on the community and its documents. But giving the owners certainty as to when the board will make decisions is a great first step.
Next, consider developing protocol for giving owner notice for special board meetings that are not held at the regular date and time. This might be an email blast, sandwich board notification in a conspicuous place within the community, or some other method. This allows the owners to know that if there is a special meeting of the board that will be called, they will have the opportunity to participate.
If the board is going to have a “working session” to discuss, advertise it as if it were a board meeting. Because it is not technically a meeting, particularly if no decisions are being made, there’s an argument that the board does not have to take public comment. However, unless the would-be attendees have proven themselves not to be civil, then letting the attendees speak is a good way to gain additional information and build community.
Sometimes there is a concern among board members that they need to get a handle on a complicated issue, such as a budget, in private so that they don’t look unprofessional in front of the owners. There can be some truth to this belief but having “secret meetings” can make the board look unprofessional in a much more damaging way. Furthermore, allowing owners to see the work that goes into revising the budget, disagreements and all, can go a long way to build the credibility of the board. For these reasons, I believe that an open and advertised “working session” is the only way to hold one these days.
Serving as a volunteer is becoming more challenging with each passing year. Regulatory pressure, increasing prices, negative public perception, and a general lack of civility have all contributed to make otherwise committed volunteer leaders rethink their commitments to their neighborhood. It is stressful but very important work. And it is understandable that volunteer leaders, who are generally very diligent and capable people, do not like to be criticized by people who have incomplete information and who may not be showing up at their best. However, adding a layer of secrecy over the board’s operations only increases the animosity among the owners and the stress on volunteer leaders.
