Many if not most boards get along famously. There are boards that have had the same members for decades and run their communities without a hitch.
We frequently get calls from readers who are troubled when they find that their board members seem to be operating under a different set of rules than the rest of the community. For example, they get preferential treatment for parking spots, ignore pet rules, fast-track their own alteration projects, fail to pay their assessments on time, and disrupt board and shareholder meetings. Rogue board members negatively affect building morale, erode residents' confidence in their board, and can even have serious legal ramifications as well.
See Why They Run
Why do residents decide to run for the board? Some might suggest it’s a thirst for power, or a Machiavellian urge to practice politics as blood sport. In fact, new people usually tend to decide to run because of a single issue that affects them personally that they want to change.
“What typically happens is that you get somebody who moves into the building, or hasn’t been active, and all of a sudden they want to run for the board,” says Martin Kera, a partner at Kera & Graubard Attorneys at Law in Manhattan. “And they’re what I call a ‘one item agenda’ board member.”
“People who run for the board usually are running after they’ve experienced something, and want to change what exists at the present time,” says Pamela DeLorme, president of Delkap Management Inc. in Howard Beach. “There are a great many of them who do it out of the goodness of their hearts—I know several people who have been on boards for over 30 years. But then there are those who run to purposely put a wrench in the whole works, and pursue their own interests.”
That’s where Machiavelli rears his ugly head. “People decide to run for the board when they see that policies have changed,” she says. “Maybe they cost of parking in the garage is going up, or there are other significant budget increases. And they don’t understand that 80% of the budget is uncontrollable—it’s set by city taxes and utilities and things like that. You really don’t have much to play with in any budget. So they all of a sudden get this increase, and they think that it’s wrong, even though they were given the explanation of what’s going on. So they’re going to get on that board. Or there are issues where they’ve experienced a leak, and to them it’s not been handled satisfactorily. Or they have a problem with a neighbor and they want to know why the board hasn’t done anything, even though it has very limited control. So they want to get on because they want something done about the person who lives in that unit.”
Straying Too Far
A primary symptom of board members straying from the reservation is the all-too-human tendency to regard themselves as above the rules. More often than not, board campaigns are issue-driven. In other words, residents throw their hat into the ring because of their own personal agenda or pet issue: a better parking lot, different pool hours, what have you.
“This behavior is almost standard operating procedure,” Kera says. “Number one is the board member who’s doing construction. You shouldn’t have a person on the board, who is renovating their apartment, and if you do, that person has to be taken out of all the decision-making and excluded from the meetings. Because what happens is they expect special treatment. So they’ve got their contractors running all over the place, they take as long as they want, and it’s contrary to the interests of the building. And from a management agency point of view, it’s impossible to control them. You have no authority over them.”
This is bad because it puts the good of an individual above the good of the building, which is contrary to the very concept of cooperative living. And it’s bad because it creates the impression of favoritism and shady dealing. Sometimes the perception is even worse than the result. As the old saying goes, the wife of Caesar must be beyond reproach.
“It’s not just actual improprieties, but even the appearance of them that board members want to avoid,” says Stephan Newman, board president of a co-op on the Upper East Side. “So you don’t necessarily have to accuse people of nasty motives, but if it looks bad… it’s probably not a good idea to do it.”
Despite his care in being aboveboard, Newman has heard rumors himself. “One person got on our board and said, ‘People are saying that board members are getting special treatment here.’ And I really got angry at him and I told him it was the opposite: we really try to make sure it doesn’t even look like we’re self-dealing. I certainly told them a different tale from the rumors they had heard in the building.”
The prudent thing to do if there are rumors like that going around, Newman says, is to address them directly and publicly. “If there are concerns about ethics, the best thing to do is to raise them in the public forum, which is the board meeting. That goes a long way… just to put it out there in the open. That’s one way of quashing bad behavior, at least if the majority of the board is ethical.”
Follow the Process
The good news is, one rogue board can make life unpleasant for the other members of the board, but he or she cannot usually muck up the works of the entire building.
“For every political group, there’s an ethos that develops. It’s set by the people who have been there for a while,” Newman says. “In my building, there are three of us who have been on the board for a long time: the treasurer, the vice president, and me. And a new person doesn’t know how the place operates. But then they show up at the meetings, and we have an agenda with ten items on it, and we go through it, and talk it through, and try to make the best decision we can. And somebody might say that we have a fiduciary obligation to the shareholders, so we can’t do X and we can’t do Y. And then when the new person wants to raise his own personal issue, he’ll see that it’s not going to be handled like, ‘I’m one of the insiders now.’ This is not just ‘how many votes can I get for my issue.’ It’s how things are discussed and how things are resolved.”
In this case, he says, the majority will rule. And that’s a good thing. “It’s a political unit. We have a seven-member board. If there’s a serious issue, all you need is four people for victory. The word ‘political’ has negative connotations but in fact that’s how democracy works. So if there’s some issue that really disturbs me, I’ll get others to be on my side. And if I’m motivated by the justice of the cause, I like to do it. There’s satisfaction in winning, too.”
Kera agrees. “When a board member is difficult or unruly, you got to do what they do in Congress. You get a voting bloc to close them down,” he says. “And then you just get them voted out at the next annual meeting. But a lot of time they get a constituency. I had that in a building where a guy roused up everybody about the board, got the whole building riled up, and then he lost the board election, and as soon as he did, he was gone.”
Power of the Vote
Voting them out can be tricky, though, especially in smaller buildings where residents are not falling over each other to serve on the board. “You can’t get ‘em off the board,” DeLorme says. “Once somebody has been elected to the board, it’s almost impossible to get them off. It has to be voted by the membership. So if you have somebody who’s gotten on, and who just doesn’t grasp it, after a while, the other board members will totally ignore that person. Like he’s not even in the room. And most of these people will get disgusted and then they won’t show up for three weeks in a row.”
If there is more than one rogue board member, or a collection of bad apples that make life unpleasant, that too can have repercussions. Management companies might pull up and walk away. “It’s not so much the board being toxic, it’s whether or not it’s financially worth the abuse,” DeLorme says. “A management company looks at it from the point of view that, I’m getting paid x amount of dollars to handle this account and in the long run it’s requiring so much extra time that it’s taking away from the other accounts. That’s when the management companies will back away. It’s the fact that they’re not cost-effective.”
This is the real danger of the rogue board member. Not that they will allow a minor rule change to pass but that they will do something to harm the way the building operates.
“A lot of the boards are running very well. They fall into sync, and everyone has a responsibility, and a job, and it works very well,” DeLorme says. “And then it’s sad to get one person on the board that disrupts it terribly, and the meetings go from a two hour meeting to, all of a sudden, a four hour meeting. And if that person gets an officer position, for whatever reason, it can really get very hairy. They can try to put changes into effect that are really detrimental to the smooth operation of the building.”
Greg Olear is a freelance writer and a frequent contributor to The Cooperator.