Effective HOA board governance

This commentary follows up on my plan to restructure HOA governance[1] that first requires addressing the attitudes and views of BODs, the members, and the public in general.  The conditioning and indoctrination by the biased views of the national pro-HOA special interest entity must be de-conditioned by a program of reorientation.

  Once again I provide valuable information on the proper functioning of HOA boards in serving their “constituents,” their members.

The management[2] of a country, a state, or a local government, including the private HOA association, is commonly known as politics.  Politics is:[3]

“the practice and theory of influencing other people on a civic or individual level. More narrowly, it refers to achieving and exercising positions of governance — organized control over a human community, particularly a state.

“exercised on a wide range of social levels, from clans and tribes of traditional societies, through modern local governments, companies and institutions up to sovereign states.

“A political system is a framework which defines acceptable political methods within a given society.”

Managing a government disguised as a nonprofit association has its unique requirements and demands that, for the most part, have been ignored.  The commonly found guidelines from the national pro-HOA lobbying entity speak to an authoritarian government with member interests and concerns being secondary to the survival of the association. It’s an unacceptable deviation from the intents and purposes of our constitutional government.[4]

First, let me address the requirements for the sound management of a nonprofit association. Drucker[5] focuses on the overall, broad purposes and responsibilities of the board of directors (BOD) or board of trustees. 

The general term “nonprofit” does not apply to HOAs because it is not a business nor a public government, but “government controls.” The reality of the HOA association is that it controls as does a public government.

Drucker asks, what is the mission of the nonprofit?  A mission statement has to focus on “what the nonprofit really tries to do.”  It cannot be “a kind of hero sandwich of good intentions.” Strategies “convert intentions into action.”

Most HOAs, especially the smaller HOAs, do not have a sound strategy that addresses their mission, goals, and values. But the HOA has an explicit mission and purpose as set forth in the CC&Rs[6] and need to be revisited and made consisted with Drucker and Batts (see below).

Second, in an excellent book on the need for director orientation,[7] the author feels board orientation is lacking and instituting a guideline will improve the nonprofit’s mission and goals. In his succinct book, as applied to HOAs, Batt’s makes the following important points:

Key areas of board action are “strategy, oversight, and policy.”  In keeping with Drucker, “boards and board members should not micromanage the affairs” of the HOA. 

The BOD has “full and final authority” over the HOA association; they are “not merely advisors” to the manager, other wisely known as the CAM. It’s regrettable that all too often the BOD abdicates to the manager and/or attorney who often are members of the same business trade group advancing their own self-agendas.

There is “no individual authority” of a board member to act and the president can only act based upon the authority set forth in the governing documents. Most presidents act, especially in the small HOAs,  without board approval.

There is  a “duty of obedience” to the laws and governing documents that all too often is ignored by not only rogue BODs, but by BODs who falsely believe to do so is in the best interests of the HOA.

Notes

[1] George K. Staropoli, A Plan Toward Restructuring the HOA Model of Governance, StarMan Press, 2020.

[2] Peter F. Drucker, “Management  is the application of a set of principles relating to the functions of planning, organizing, directing and controlling an organization to effectively achieve organizational goals,” The Practice of Management, Harper Row, 1954.

[3]Politics,” Wikipedia.

[4] See Roger L. Kemp, “Forms of Governance,” Managing America’s Cities: A Handbook for Local Government Productivity, McFarland & Co., (2007).

[5] Supra, n. 1.

[6] See  “Restructuring HOAs – intents and purposes,”  supra n.1.

[7] Michael E. Batts, Board Member Orientation, Accountability Press, 2011. It’s a short, to the point, and  easy to read paperback.  Batts has over 25 years on nonprofit boards and has served on several Washington panels.

Reorienting the HOA board and its followers

Mentoring: Reorienting HOA board – mission

Review of StarMan Group Mission

    • to establish the climate and culture of the HOA enabling the restoration of the lost constitutional principles of democratic government — individual rights, justice and fair play — for its members within the confines of a private contractual government, and
    • to remove the very strong external influences of the special interest vendors and lobbyists who are the primary causes of this deviation from the general societal norms and values.

In earlier papers I described the Cultural Dynamics[1] of and the domination of HOA-Land[2] by industry “stakeholders” who claim a special interest in your HOA controlled home. I maintained that the Community Associations Institute (CAI) dominates and heavily influences the decisions and functioning of boards (BODs) through its strong influence on state legislatures adopt biased and unjust laws detrimental to the members. CAI’s effect on the BOD, the members — especially the loyal “followers” — and the public in general stems from 45 years of indoctrination by means of the CAI School of HOA Governance.[3]

This series, “Restructuring the HOA Model of Governance,”[4] offers a plan, conforming to the principles of organizational development,[5] to return HOA-Land to democratic constitutional government and cease being a protected outlaw government functioning outside the Constitution and laws of the land. Having introduced my positions on the role of the BOD in its policymaking capacity and the heavy hand of CAI, I now address the need to reorient the BOD with its huge authoritarian[6] powers that would not be allowed under municipal governments.

“HOAs currently engage in many activities that would be prohibited if they were viewed by the courts as the equivalent of local governments.”[7]

I wrote, “The policy makers have failed to understand that the HOA CC&Rs have crossed over the line between purely property restrictions to establishing unregulated and authoritarian private governments.”

BOD reorientation

Addressing nonprofit organizations, eminent management consultant Peter F. Drucker wrote: “The first job of the leader is to think through and define the mission of the institution. . . . One of the most common mistakes is to make the statement [a series] of good intentions.[8] It has to be operational, otherwise it’s just good intentions. Using my prior example of a large-scale active adult HOA in Arizona, I contrast the mission, goal and values statements that illustrate an effective and productive community.

HOA vision statement: [HOA] is the premier active, age−restricted community in Arizona.

Restructured Vision Statement: To become the premier active, age-restricted community in Arizona.

HOA mission statement: [HOA] provides residents with a high−value community, with resort−style amenities, in which every person can choose to participate and live well, based on their needs and desires. This high standard will maximize our investments and promote our well−being in an active close−knit community.

Restructured Mission Statement: To provide residents with a high-value community with resort-style amenities to maximize our investments.

HOA values statement: In support of our Mission Statement, we hold to these values:

      • We foster relationships built on respect, trust, and effective communications.
      • We listen to understand.
      • We are open−minded, collaborative, and always look for ways to improve our community.
      • We believe in life−long learning and a desire for active well−
      • We are a forward−looking, fiscally−sound community
      • We encourage an environment of empowerment and personal responsibility.

Restructured Values: We believe in a community culture having high standards and principles of conduct and behavior.

These HOA views and attitudes came quite as a surprise considering that it is a $20,000,000 revenue operation, and one would expect it to do better than that. My impression is that they are a prime example of the BOD’s mistake of using lofty, high and mighty statements lacking focus and aimed to give the appearance of good intentions, as Drucker explained above. These HOA statements read very similar to CAI’s propaganda and its advice and training offered by its School of HOA Governance.

The time is well passed for the BOD to drop CAI as an advisor, as CAM and as its HOA attorney. It’s well passed the time for BOD’s to learn about the effective and healthy council-manager form of local government.[9] Not that public government is perfect but it is far better in upholding the principles of democratic government lost under the adhesive CC&Rs “constitution.”

(Part 2 of the Reorienting HOA BOD will discuss BOD failure to attract member commitment as volunteers).

 

Notes

[1] George K. Staropoli, HOA-Land Nation Within America, Part 1, “The Cultural Dynamics of HOA-Land” (2019) and High RWA followers can be found in HOA members. (2019).

[2]HOA-Land is a collection of fragmented independent principalities within America, known in general as HOAs, that are separate local private governments not subject to the constitution, and that collectively constitute a nation within the United States”, Defining HOA-LAND: what it is (2017).

[3] George K. Staropoli, Restructuring HOAs: “CAI School and member benefits” pt. 2 (2020) and CAI School faculty advice – managing HOAs (2020).

[4] George K. Staropoli, Restructuring the HOA model,(2019).

[5] See in general, “Organizational Development,” George K. Staropoli, (2019).

[6] Supra n. 1.

[7] Evan McKenzie, Privatopia: Homeowners Associations and the Rise of Residential Private Governments, Yale Univ. Press, 1994.

[8] Peter F. Drucker, Managing the Nonprofit Organization: Principles and Practices, HarperCollins (1990).

[9] See in general, Roger L. Kemp, “Forms of Governance,” Managing America’s Cities: A Handbook for Local Government Productivity, McFarland & Co., (2007). They are: Strong Mayor, Council-Manager, Town Meeting (direct or representative democracy), and Commission.

CAI attempts turning volunteers into HOA leaders

Tom Skiba, CEO of CAI, is concerned about the lack of member volunteers to lead their HOA in his Ungated post under the column, “News and Insights on community association living.”[1] As he argues for more volunteer leadership and activism, he doesn’t realize that he’s admitting to 45 years of failure to solve HOA problems.

That’s why, for more than 45 years, we have supported the belief that homeowner involvement is essential, and that education is a critical component to an association’s success. . . . At CAI, we know there is usually a correlation between the level of homeowner involvement and the long-term success of a community. . . . it’s the homeowner volunteer leaders who are accountable to their neighbors.

Skiba’s concern is understandable when, illustrative of the problem, a large, active adult resort style HOA has been facing failure and having difficulty attracting members to become active in management. And that’s after 3 years earlier an independent and professional strategic plan recommended an educational program to assist in obtaining members to serve in management.  It has been ignored.

CAI has introduced a program designed to educate volunteers to become effective and productive HOA leaders by taking its CAI Board Leader Certificate Course and obtaining the CAI Board Leader Certificate. It seems however, that Skiba is a little bit unsure of this program to create leaders from average people: “After completion of the course, students will acknowledge that they’ve read and understood three key CAI educational resources:” Why the acknowledgement? For what purpose? Is this an oversell of CAI’s attempt to bolster the ego and acceptance of board directors and officers as being “somebody” and an authority? “Community leaders who complete the CAI Board Leader Certificate will receive a certificate of completion and recognition on the CAI website”.

This course, recognizing that “leaders are responsible for setting policy and making decisions . . . . highlights what every board member needs to know to serve effectively,” contains 5 modules:

    • Module 1: Governing Documents and Roles & Responsibilities.
    • Module 2: Communications, Meetings and Volunteerism.
    • Module 3: Fundamentals of Financial Management.
    • Module 4: Professional Advisors and Service Providers.
    • Module 5: Association Rules and Conflict Resolution.

From what is available online, as indicated above, my thoughts are more of the same. There is nothing to make me believe that this course addresses questions of effective leadership. It appears to make use of the inbreeding and indoctrination by the CAI School of HOA Governance.[2] A doing it my way program without any discussion or presentation of effective local government management[3] or any general qualities of what makes a genuine leader.

Travis Bradbury explains leadership:

Leadership has nothing to do with titles. Leadership has nothing to do with personal attributes. Leadership isn’t management. Leadership isn’t something that anyone can give you—you have to earn it and claim it for yourself.[4]

In addressing the management of nonprofit organizations, eminent management consultant Peter F. Drucker wrote: “The first job of the leader is to think through and define the mission of the institution.” [5]

In the inbreeding atmosphere within HOAs where the volunteers are sought who are not disruptive — who do not dare criticize the BOD — Terrin Allen warns about YES men.

In my experience, most people get this way because they are responding to a culture or people in management who elicit and reward this type of behavior. . . . [in order to] survive on a dysfunctional leadership landscape where all the signals and messages confirm for them that dissent is bad and agreement is good.[6]

Summary

I appreciate Skiba’s concern for responsive HOA management, but CAI’s approach is severely lacking. There is the continued absence of democratic institutions and principles. that would send a message to those truly seeking to create a healthy and productive community; a true community not focused on property values and enforcement of the governing documents alone.

A healthy society and community must be supportive of their membership who still naively believe their HOA is a democracy in action and protective of their individual rights and freedoms. Where they truly have a voice and fair elections to make that happen. I offer an alternative legal model of HOA governance to accomplish this task. See HOAs are in need of a major restructuringg and sequel under Restructuring.

consulting SIG image1Notes

[1] Tom Skiba, “Effective leadership: How board leader education moves communities forward,” (March 5, 2020).</p>

[2] I collectively refer to CAI’s policies, best practices, guides, communications, seminars and certifications, and in its Manifesto as the CAI School of HOA Governance.

[3] Roger L. Kemp, “Forms of Governance,” Managing America’s Cities: A Handbook for Local Government Productivity, McFarland & Co., (2007).

[4] Travis Bradbury, “What Makes a Leader?”, Success.com (May 25, 2019).

[5] Peter F. Drucker, Managing the Nonprofit Organization: Principles and Practices, HarperCollins (1990).

[6] Terin Allen, Are You Creating ‘Yes Men’ And Hindering Your Own Leadership Success?”, Forbes.com (Nov. 10, 2018).