Community association and co-op boards typically consist of elected volunteers whose job is to serve the best interests of the community in day-to-day decisions both big and small. In an ideal world, every board would live and die by its fiduciary duty, making well-informed choices that not only keep its community or building solvent, but also maintain a pleasant environment in which to live. But would even that ideal scenario be enough? If a board is doing all the right things but fails to communicate the hows and whys of its decisions to its constituents, will those decisions be received approvingly?
Truth is, in addition to making good decisions, it also falls to the board to communicate those decisions – as well as how they were reached – to its community in a clear and digestible way. The reasoning for this goes beyond just getting reelected; to a diligent and capable board, optics may seem performative – but they’re actually a crucial part of being open and transparent with the residents that board represents. A certain amount of marketing and salesmanship is often needed to get buy-in from the folks most directly impacted by a given board decision. A board that does the right thing without showing its work can still face backlash from residents who interpret the board’s discretion as secrecy, or who don’t see immediate positive results from the board’s endeavor.
The Messaging Matters
“Optics are extremely important,” says Thomas O. Moriarty, a principal at the law firm of Moriarty Troyer & Malloy in Braintree, Massachusetts. “While perception of performance alone is obviously not enough to deliver results, results alone are not enough to ensure contentment among unit owners. The fact of the matter is that unless a board has systems in place to ensure that unit owners believe they have a voice in the process of governance, those owners may never be happy with the results. In addition, if the actions and deliberations of the board are not transparent, unit owners may not even be aware of the issues the board is confronting – nevermind whether the board has done a competent job pursuing resolutions.
“Knowledgeable unit owners understand and expect that when they buy a unit, they become members of a self-governing association,” Moriarty continues. “While they might not volunteer to serve on the board, they nevertheless have an important economic and personal interest in how the board conducts its business. A unit owner who cannot obtain enough information to reasonably assess the merits of his or her board’s decision-making is not going to develop confidence and trust in that board. This can lead to frustration and skepticism.”
Moriarty goes on to say that when boards fail to communicate their process to owners, owners nearly always perceived that as negative. “While there are always exceptions based upon the need for confidentiality – attorney-client privilege, for example – or because statutes may prevent the disclosure of certain information,” he says, “in every other circumstance it is almost always better to communicate as much information as possible, even if the information is not what the owners want to hear. Reasonable unit owners will understand that not all news is good news, and they will be more content with board operations and governance if they have more accurate and reliable information, good or bad.”