A Properly Managed, Organized, and Prepared Committee Can Be an Invaluable Asset to BoardsJuly 2019 | By: Michelle P. Quinn, Esq. | GDB 2019 Summer Newsletter
The Board of Directors of a mid-sized Manhattan cooperative recently learned the hard way that they cannot do everything, as their monthly meeting dragged on into its 4th hour. Trying to focus on the minutia of every project and issue proved to be too much to discuss in a typical 1-2 hour meeting. Delegation was imperative; committees had to be formed.
Boards of Directors and Boards of Managers have their collective hands full with administration of building operations, capital projects, staff and owner issues, and the like. Many boards look for more flexible ways of managing their workload while adjusting to the board’s evolving needs. The creation of committees, especially in larger buildings, can potentially lighten the load. But do they? Or do they create even more work? Committees can be both a substantial benefit to boards and an unexpected burden as well.
The creation of committees is typically authorized by a condominium or cooperative’s governing documents. In addition, New York Business Corporation Law §712 specifically empowers cooperative corporations to do so.
Some advantages of establishing committees include: owner participation in the affairs of the building, especially individuals with specialized knowledge, skills, or background; direct feedback from the community of residents on proposed projects or changes in the building; delegation of tasks, due diligence, investigations, and other legwork on the details of projects; and an increased number of new ideas or strategies.
But committees are not without drawbacks, such as: the requirement of board oversight, which may be burdensome if there are too many committees; lack of direct control over an investigation or project; owner or resident disinterest may impede participation and effectiveness; members may not speak for or represent the interests of the majority of the other residents; inadequate leadership may result in a lack of focus or direction; and committees may exceed the scope of their authority.
Members should be committed and willing to spend the hours needed to accomplish their tasks. They should understand time constraints and deadlines, and should recognize that the committee does not make decisions, but rather advises, recommends, or carries out an assignment.
In deciding whether or not to establish committees, it is important to:
- create clear mission statements which define the parameters, the specific purpose and goals, and the scope of each committee;
- decide if members will be permitted to vote or simply advise;
- set limits on the number of members;
- decide if members must be in good standing to participate; and
- decide if the committee is limited to residents versus owners.
Each of these factors should be clearly expressed to potential committee members from the start.
Committees can be perpetual or project-specific. Common types of ongoing committees are social, gardening, building/structural, safety, financial, capital improvements, and communication. Project-based committees can assist with a specific proposal in performing due diligence, getting feedback, and gathering votes. Some boards do not form any standing committees; rather wait until a need is identified, and then form a provisional committee to carry out the necessary charge.
Committees can be a practical way to structure and manage the board’s work. Sometimes a smaller group can be more focused and efficient in dealing with issues than the full board. A committee is created to provide counseling and advice for the board or to handle a task on the board’s agenda. Any recommendation made by a committee needs to be approved by the board. But remember, the board is not obligated to adopt or implement committee suggestions. Committees are more effective when their charter and scope of work is clearly defined by the board.
A streamlined committee structure makes board work easier. The formation of an effective committee comprised of building residents and owners, when there are both ongoing concerns as well as project specific matters, can be invaluable if properly generated, guided, and governed.