Board of Directors and Meetings
Committee Work the Right Way
From the Volume 12, Summer 2022 issue of the CCI GHC Condo News Magazine
Let’s talk some more about committee work. Our spring article entitled “Succession Planning for your Condo Board” set out some sound reasons for initiating some committees reporting to the board.
As a reminder some potential committees could include, an annual nominating committee, a communication committee, a safety committee and a gardening committee. Individual condo communities can consider their needs and set up the appropriate committees to help.
Here are some benefits of establishing some working committees:
- Committee work involves volunteer members of your community in ways that can prepare them for future directorship.
- The CAO appears to be increasing the scope of management practices around condo governance. The suggestion of an annual plan, annual surveying of residents to learn of their concerns are but two examples.
- Additionally, the CMRAO has identified 79 competencies that will headline future training for property managers. This could mean a lot of things, but higher management costs would be one.
- This leads us to the next point about Property Managers; that being their workload. Some condo boards just keep downloading more work to their PMs and at some point, something has to give. The answer? Committees can and should do some of this work.
- The challenges of future boards in terms of replacing maturing assets could require additional expertise. Think also of new requirements such as charging stations, the planning and financing of them.
The list goes on, but we need to discuss the ramifications of committee work.
Boards should think of committees as people to do research, data gathering and providing recommendations to the board. They are not decision makers! Their mandate from the board should be clear and they should always meet with a “board liaison” present. The mandate should be written not just verbal. The liaison should never be the PM.
In fact, the template, as established by the CCI Golden Horseshoe is excellent. I know our communications committee has a board liaison and I assume all the other committees do as well.
Finally, we are talking here of committees “to the board” not “of the board.”
So where are the impediments?
Insurance and legal
We reached out to experts in both areas. The big question seems to be the insurance issue. Should committee members be insured like the board members (D & O Liability)?
Secondly, should committee members be insured for injury (to themselves) and to others. This might sound a bit strange but assume the existence of a gardening committee. A volunteer might slip and break an ankle or a volunteer using a whipper snipper could cut a second person’s finger.
We spoke with Tom Gallinger of Atrens Counsel Insurance Brokers. Tom was able to provide us with the general insurance scenarios as outlined above. “If the above insurance is not considered for volunteers it could result in unforeseen out-of-pocket costs for the condo or volunteer if an error or accident occurs.”
The good news is that it may not be a monumental additional cost. Our suggestion here would certainly be to contact your insurance provider for guidance.
According to Maria Durdan, partner at SimpsonWigle Law, it may also be a good idea to deem committee members officers of the Corporation, so that those individuals, as well as the Corporation, are protected by the Corporation’s Directors and Officers Liability Insurance.
Condo Corporations can and should check-in with their insurance and legal advisor.
Consult with your insurer and legal advisor.
In our other article this month (Condo Financials), we were extolling the virtues of consulting with your accountant as an advisor. This is a great opportunity to utilize both your legal counsel as an advisor and your insurer as an advisor.
Tom Gallinger’s word of Caution
“Do not substitute a volunteer to replace a licensed professional in order to save money.” Think electrical! This could be dangerous, and it might cause your insurer to be grouchy. (Tom didn’t say that I did.)
To Committee or not to Committee
This is where the practiced “decision-making” corporations will always emerge on the right side. The decision to establish a committee is best guided by a costing-out if you wish of the alternatives.
Assume your development employs a landscape company to cut grass and plow snow. Now you want the surrounding gardens to look more attractive. You ask the landscape company for a quote on the garden work. You ask your insurer for a quote to provide the right coverage for a volunteer group.
Did someone say the price is right?
The answer will be in the lowest cost approach, and I suspect that the committee side will not only be cheaper but will have pride of ownership in their work.
The same logic applies to any other committee including those with “nerdier” work. In any community you will be surprised at the expertise that is residing within. I have told the story before that within a few units in either direction of mine, we have no fewer than 5 folks with either corporate executive or government executive experience.
Committees as an Investment in the Future
Too often, the condo industry drones on and on with the same people on the board. If someone new can get elected, their ideas and expertise are often ignored to the point they give up in frustration.
It is a given, that the challenges of “managing the affairs of the corporation” will become greater and more complex in the coming years. There will be a general morphing of activity from controlling to managing, which is what the Condo Act intended in its legislation. Indeed, the notion of change is difficult for many folks to get their minds around. That said, if change isn’t encouraged………then it will be mandated in time.
The proof of this is in companies like UBER…………they disrupted the taxi business and at the same time provided a whole new approach to fast food delivery.
So, a great first step for condo boards is to foster some committee work to bring in some fresh people with fresh problem-solving ideas. If nothing else, the current pop-up round of inflation is a great example of unexpected challenges to be met.
Maria Durdan of Simpson Wigle Law LLP
Rod Escayola of Gowling WLG
Tom Gallinger of Atrens Counsel Insurance Brokers
CAO - Best Practices Bulletin
CMRAO – Competency Profile for Condo Managers in Ontario
Dave Williams is a graduate of York University and a retired corporate executive. We always appreciate hearing from readers at firstname.lastname@example.org.
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