Two keys to a successful board meeting are organization and preparation.
Without these elements, the board members won't have all the information
they need to make decisions, and their meetings can be long, tedious
and largely ineffective.
Attorney Ronni Lynn Arougheti, who is president of the management company
Heron Ltd., teaches that successful board meetings need a comprehensive
agenda and a firm policy of sticking to it.
"A meeting can't be conducted in an informal manner," she
says, noting that board members should be cautioned against raising
surprise topics during meetings. Instead, topics should be cleared in
advance so they can be placed on the agenda, giving colleagues time
to consider the matter and prepare questions.
"You have to try to avoid a situation where the meeting is ready
to adjourn and a member brings up a new topic that has not been researched,
keeping everyone there for another hour," she says.
This doesn't mean that meetings can't occasionally stray onto uncharted
-- and potentially useful -- ground. For example, during a board discussion
someone may present a new but relevant idea that merits some exploration.
"That's fine," says Ms. Arougheti. "What you want to
avoid is the board member who is constantly bringing up unrelated new
topics and pet projects that are not on the agenda."
READ REPORTS BEFORE MEETINGS
A typical board meeting should begin with the property manager's report.
This document should detail operations from the time of the previous
meeting, and should be presented to each board member in advance of
the meeting. Here is where many buildings make a crucial mistake: if
the managing agent's report is first presented at the board meeting,
board members must digest the information and formulate questions on
the spot. This wastes valuable time and could cause important issues
to be overlooked.
If the agent provides a succinct written report to every board member
at least three days before the meeting, then board members can be required
to acquaint themselves with the material and to come to the meeting
with pertinent questions. For example, Ms. Arougheti says her firm prepares
a written narrative management report that covers everything that went
on during the month. She attaches every piece of correspondence, copies
of bids and estimates, and other paperwork that pertains to operations.
This report is separate from the monthly financial report, which agents
should also furnish to board members prior to each meeting.
"This makes the board meeting go much faster, because many questions
are answered by simply reading the report," she says.
"Having this ahead of time also allows the board to
incorporate additional items into the meeting agenda."
Other good reasons to have written management reports: they
help bring new members up to speed on building issues, and
they can be used as an historical reference to back up the
corporate minutes by showing when and why decisions and
actions were taken.
REASONABLE TIME FOR REASONABLE
Sometimes it takes more than one board meeting for a difficult decision
to be made. Rather than allow prolonged discussion on a controversial
issue, many boards invoke preset limits for debate. When 10 minutes
have passed without a consensus being formed, the issue can be referred
to a committee or back to the agent for supplementary information for
the next report to the board.
Of course, having these reports is of no use unless board members read
them -- and, unfortunately, many directors don't, says Ms. Arougheti.
"Before you can have an effective meeting, you have to have effective
directors," she says. "Many people don't give enough thought
to what will be required of them when they get on the board. It takes
a lot of time. It means reading financial statements and attending board
meetings and other meetings."
She notes that it's the current board's responsibility to educate shareholders
and owners about what will be required of them as board members, so
"that you can get candidates for the board who are prepared to
give what the building needs. If the board is voting on something that
is detailed in the management report but you have not read it, how can
you expect to make an educated decision? If you read the report at the
meeting, then you're delaying the meeting."
Similarly, boards cannot operate efficiently at meetings if members
don't attend regularly. When they do come, the rest of the members often
fall into the error of taking time to bring them up to speed. One solution
to this problem, says Ms. Arougheti, is to set an attendance requirement.
"No board can operate effectively if people show up at will,"
she says. "If someone makes a commitment to serve on the board,
they should know that they must attend meetings. And I've found that
you will always get better attendance if there is a rule for all meetings."
This would apply to board meetings, committee meetings shareholder and
annual meetings and special meetings with professionals and contractors.
Your board must decide how strict it wants to be about attendance.
For example, some boards stipulate that anyone who misses more than
two or three meetings in a year will be asked to resign. Others give
more leeway. Of course you can always make exceptions when people have
emergencies or other good reasons for missing meetings.
Another way to ensure better attendance is to create a calendar of
meeting dates at the beginning of each board year. Don't wait until
the end of one board meeting to select a date for the next meeting because
"this puts the board in the position of having to work around everyone's
schedule, when this one has theater tickets and that one is going on
vacation," says Ms. Arougheti. Instead, she recommends selecting
a specific meeting date. "Perhaps make it the third Thursday of
every month, or every six weeks. This way people can plan their other
events around the board meetings, not the other way around. This also
helps solve the problem of having a quorum at board meetings."
If board meetings are well organized, with all members fully prepared,
there is no reason why they should last more than an hour or an hour
and a half, says Ms. Arougheti. "It's all about informed decision-making,
not social time or endless debates," she notes. "If socializing
is important to your board, first finish the business at hand, then
you can take time to chat."