Turning Over a New Leaf: Fixing Previous Board Mistakes

A board’s role is to govern and set the policies, procedures, standards, budgets and programs for an association. Some decisions boards make are extremely beneficial, while some don’t have a substantial impact, and others fail miserably. Unfortunately, when a board makes a bad decision, it isn’t immediately obvious, and a future board of directors may be left to deal with the repercussions. Here are seven tips to keep in mind when fixing previous board mistakes.

1. Remember to uphold your fiduciary duty.

As an elected official of the community, you’re required to uphold and fulfill your fiduciary duty. Your fellow community members have chosen you to act on their behalf and they trust you to always act in their best interest.

2. Use the Business Judgment Rule.

Any decisions should benefit the majority and be made using the Business Judgment Rule. The term Business Judgment Rule means that the actions of the board are judged based on whether an ordinary person, under the same circumstances, would have acted in a comparable way.

3. Do your research.

Once a mistake has been identified, you should conduct extensive research on the matter at hand. Consult your management company, interview former board members, and create committees to help ease the burden and defuse emotions.

4. Review governing documents.

Determine if the previous board’s decision follows your community’s governing documents and state, local and federal laws. Keep in mind that just because a decision was legal doesn’t mean it still needs to be practiced. Consulting legal counsel for guidance is recommended.

5. Communicate early and often.

If a decision will directly affect homeowners, it’s important to communicate early and often. Change can be difficult, so education and transparency are the best ways to overcome any challenges.

6. Avoid the negatives. 

Present all information in a positive way. Highlight how changes will improve property values or quality of life, and don’t make negative comments about the previous board.

7. Set reasonable timelines.

Once it’s time to implement the changes, set reasonable timelines in which community members should comply or follow the new rule. Use newsletters or community platforms, like TownSq, to give your homeowners plenty of notice of the effective date.