The conflict between Board and Management

MB writes:

Dear Paul: I am a property management company representative and find that sometimes directors believe that their role is that of a manager. When this happens it sometimes makes our job more difficult because we do not know what we can and cannot do without board approval. As you can imagine this can create conflict. How should we approach this situation?

Paul replies:

Dear MB: Thank you for your question. Unfortunately, the situation that you describe happens more often than not when directors and managers do not understand each other’s roles. Directors should “direct” and “managers” manage. While we all agree with this concept, in theory, putting it into practice may be more challenging. Note: Smaller boards are certainly an exception to this concept just by the nature of their size. A board is made up of individuals from every level of education, with or without previous business experience, with or without previous board experience. Property managers hopefully come with a wealth of experience in the operation of condo projects. Unless these two entities agree on the division of responsibilities, conflict is bound to occur.

The ideal scenario is when the board sets policies and provides direction for management to follow. The manager is responsible to execute the board’s directives. The first place to start is with the agreement between the board and the property management company. The expectations of each party should be clearly defined. An agreement that leaves too much uncertainty will quickly sour. Any item that is not clear in the Agreement should be defined in practical operational terms in a policy or directive as the relationship develops. Just as a relationship between two individuals may take some time to run smoothly, a board-management partnership will not happen overnight. For example, if the board wants to consider three quotes from waste management companies for garbage pick-up, it is not up to the board to solicit quotes. This is the manager’s job. The board’s role is to select the quote that meets the condo corporation’s needs. Management is free to advise the board in selecting the best quote, but the decision rests with the board. If the board wants something done in a specific manner, the board must communicate this to management. Otherwise, management will use its best judgement in performing the task. Good luck!

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