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Delegating responsibility is a good way to get things done.
A wise person once said, “Nothing is impossible if you can delegate.” Nowhere is this more obvious than on a busy co-op or condo board. That’s why many boards appoint committees to take on some of the work of everything from admissions and capital projects to social events and gardening. But giving these committees the right amount of authority can be tricky.
Though most bylaws lay out some very basic rules on establishing committees, much is left to the discretion of the board. Committees can be empowered to spend money, make binding decisions, or even match the board itself in terms of authority.
“It’s up to the board to decide how much authority to give, and the ‘right’ amount can vary,” says Theresa Racht, a partner at Racht & Taffae in Manhattan, who leads a seminar on committees at the Council of New York Cooperatives and Condominiums’ annual conference.
Micromanaging your committees can defeat the purpose of having them – which is to save time and let you run your building or complex more efficiently. But give the wrong committee too much freedom, and you can have misunderstandings or intentional overreaching. Here’s how to know whether you need to keep the reins tight or let your committee run.
Freedom to Move
When the 15-member board of directors at Turner Towers, a 189-unit co-op in Brooklyn, needs to undertake a major improvement, it turns to its capital committee.
“A full board meeting is not the best place for in-depth discussion about something like a roof replacement,” explains Susan Cooke, board president. Instead, such issues are explored by the committee, which comprises five board members, including Cooke.
Typically, such “boards within a board” are the most trusted and autonomous committees, says Racht. These smaller groups may have nearly as much authority as a full board, but their smaller size makes them better suited to do detailed research and analyze alternatives, especially when the board itself is large.
“If you have a trusted group with a clear directive, you can empower that committee to take action without coming back to the board for every little thing. That way you can save time and energy,” says Racht.
In special cases, a committee can even be given the exact same authority as the board, in which case it’s referred to as an executive committee and is required by most bylaws to contain only elected board members. These are usually formed to exclude a particular board member, which is most often necessary when there is some sort of litigation against a sponsor who holds a seat on the board. Executive committees can also be formed in other cases when a board member or members have a conflict of interest.
The Happy Medium
One Upper West Side co-op set up a five-member committee of architects and other professionals to work on a lobby redesign, but the board made clear it wanted ideas and advice, not completed architectural plans. “They were instrumental in coming up with a plan at the macro-level, not the micro-level,” says Jane Wexton, the board’s assistant treasurer.
The committee also did much of the legwork in hiring an architect and, once the board approved the final decision, handled most of the project management within a budget established by the full board. Such a balance of board oversight and committee freedom is often a great way to handle special projects, which usually have a clear-cut mission and draw in shareholder volunteers with special expertise.
“When you have a lot of people with professional experience and they have good judgment, you can usually let them run on their own a bit,” says Tony Pellosie of Gerard J. Picaso Inc. Pellosie is executive manager at Gerard Towers, a 563-unit co-op in Queens with 10 committees to help handle board business. These kinds of committees often have at least one board member to act as a liaison and still need to be given some parameters – for instance, a clearly stated budget, scope, and timeline. But within that framework they can do a lot of the heavy lifting without burdening the full board with minor decisions.
Similarly, certain standing committees, like sales and admissions, can be empowered to handle time-consuming details while leaving final decisions to the board itself. “Our sales committee had been functioning longest, and in some ways functions the best because it has a well-established routine,” says Cooke. “The board can rely on them to review financials, check credit ratings, and do preliminary interviews, so by the time the buyers get to the full board interview, it’s pretty pro forma.”
Still, not every committee needs to be given very much authority – or even any at all. Some, like welcoming and social committees, are fairly low-responsibility by nature because they spend very little money and serve a purpose that’s limited in scope. But it can also be useful to establish committees that are purely advisory. Not only can they do a lot of research and produce some good ideas, they can also be a good testing ground for potential board members or even a way to mobilize disgruntled shareholders.
“Often you will get people who spend a lot of time complaining about how things are run,” says Racht. “A classic way to handle this is to set up a committee for them to revamp the house rules or bylaws and then appoint them. Either they’ll come up with something useful or they won’t, but you have nothing to lose, because the board isn’t obligated to act on their suggestions.”
Other committees might have a broader mission but need to be managed tightly, either because they’ve run into trouble in the past or simply because they involve a lot of unproven members. Frequent monitoring and strong leadership are key to keeping such committees on task, and boards should err on the side of caution by reserving the right to approve even small expenditures, and requiring – and reviewing – meeting minutes.
Having the president appoint committee chairs is another good way to run a tight ship, says Dan Lowenstein, board president at Morningside Gardens, a 960-unit self-managed co-op in Manhattan. “I always choose people who are reliable and capable of strong management,” he says.
If a committee does go too far – like the operations committee of one co-op that called in the super and gave him a major dressing down despite having no authority to do so – the board should quickly step in and remind the members what they can and can’t do, or even remove troublesome people or disband the group entirely, says Racht. Think of it as a lesson learned. Getting it right the next time will be that much easier and well worth the trouble.