This is something so near and dear to my heart that I couldn’t resist sharing some of the information I’ve found on the subject.  I think these traits are the key to a successful Condominium Board of Directors.

Openness and transparency should be the heart of a Board of Director’s ethical standards.  Why would any association keep records, funds, or meetings secret?  There should be no reason, after all, they have a fiduciary responsibility to the Council of Owners.  A successfully run board would make transparency a priority, but evidently this can be a big problem for some associations.  Boards get defensive and nervous when asked for records.  I know my dad always told me to “avoid the appearance of evil”, I think every board should do the same.  The keys to transparency are open communication, open spending, and open records.  I can’t tell you how many articles I have read that say that secrecy of board members may give an exaggerated sense of empowerment.  They may forget their function is administrative.

Most owners don’t care about seeing records unless they suspect something is wrong.  So, when asked for records, some boards get a little up in arms.  They may be concerned that someone may find something in the records that could lead to them being accused of doing things improperly.  Unfortunately, most people mismanage their own money so, when they are elected to the Board, there is a very good possibility that they mismanage the association’s money.  They are secretive because they are embarrassed and they were hoping no one would notice.

Another reason is simply a lack of knowledge.  Some boards do not understand the legal requirements and their duty to provide records to the owners. We condominium owners in Montgomery County are fortunate that training is required, they saw the need and they implemented it – good for them, other jurisdictions have yet to follow.

Of course, we have other laws and regulations that should guide Condominium boards towards openness and transparency.  Maryland has its Open Meetings Act, sometimes referred to as the “Maryland Sunshine Law” – it requires many entities, including community associations, to hold open board meetings.  Many articles on the subject warn that boards of directors must not meet in the shadows, they must follow the law and not hold meetings behind closed doors.  The exception is when the board directors need to meet with the board’s attorney to seek legal advice, or, if the board is meeting to discuss employee and personnel matters, or owner’s personal information.

Also, financials should be disclosed at each board meeting. Approval for the expenditure of funds should always be a resolution of the board in an open meeting. (That means any association money spent should be voted on at the meeting by the board directors in front of all the members.) Contracts – including management, maintenance, and security to name a few – should also be voted on and approved in an open meeting of the board. Further, the vote should be recorded in the minutes and become a permanent record of the association.

Each board member is equally responsible and liable for the association affairs.  I can’t find one good reason why any board member should not have access to records “at will,” as long as protections are in place to preserve the integrity of the records.”

During my research, I have found that many managers and attorneys will refuse to work with a secretive board since it creates potential liability for all involved.  Some even try to educate the misled board members.  Unfortunately, there will always be the attorney or manager who looks the other way when the board of directors acts improperly, and this is unfortunate.

Successful board members should be honest and open and willing to work with their neighbors and fellow owners and respect their ideas and concerns.  There is a common goal between board members and owners, there’s no personal agenda, it’s to do what’s best for all in a manner that will keep the majority happy.

“The very word, secrecy, is repugnant in a free and open society, and we are as a people, inherently and historically opposed to secret societies, to secret oaths and to secret proceedings.”  – President John F. Kennedy