The Meter is Running
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AUTHORAndrew S. Lazarus, Senior Vice President
PAGE #pp. 84-85
THE BIG PICTURE
While many shareholders and unit-owners may be familiar with what it means to be on the board, the act of joining a board changes a person’s responsibilities. It’s important that the new board member understands what these changes are. In fact, it is a good opportunity for a discussion with all board members that usually starts with a general discussion about what is (or is not) appropriate for board members and typically includes issues of transparency, communication, and confidentiality.
We often include a discussion about a code of ethics for board members. The board should adopt a code that has been developed over time, often with the assistance of both the building’s managing agent and attorney, which will serve as a guide to help board members understand their roles and responsibilities.
We find that boards will frequently discuss issues like this around topics such as staffing, long-term capital planning, or a large-scale capital project. The code of ethics helps guide the board as to what is appropriate to share with shareholders, how it should be best communicated, and when. As issues like this come up, we find that it’s an opportune time to discuss how the board should work and what is appropriate for boards to do before information is communicated to the building as a whole.
These conversations about the board’s responsibility, role, and code of ethics also remind boards that they are responsible for running the corporation or the condominium and have a fiduciary obligation to do that. It also reinforces that the board should be thinking about decisions that affect the entire building and all of its residents.