 Ladies and gentlemen, Aloha and welcome to this week's episode of Condo Insider. My name is Jonathan Billings. I will be your host today and we will be discussing effective one-hour board meetings. I have noticed over the past several months due to the recent COVID-19 pandemic and the fact that associations now are required essentially to conduct remote board meetings via Zoom or go-to meeting or WebEx or what have you that the board meetings tend to be a little bit more lengthy and people tend to get off topic and do not stay on course or stick to the agenda items. That being said, I have prepared some slides today that I think are beneficial for board members to review and to consider when you are conducting your board of directors meetings. That being said, I've prepared a couple of slides that I'll put on your screen here in the next second and we kind of will go through those slide by slide. That being said, just as a reminder for board members and owners that the board meeting is a critical time for the decision-making process and implementation of policy for your associations. What we have been seeing in light of the recent COVID-19 pandemic is that sometimes these board meetings tend to become a little bit of a social hour just due to the fact that people are not getting a lot of interaction with one another. However, it is important to remember to stick to the topics of the agenda and know the reason for your board meeting is to make those decisions and implement your policies. Just as a reminder for board members and for owners that there essentially are just a few items that the board is responsible for in regards to when you're conducting your board meetings. One, to conduct business in regards to administrative business, financial business, review your property maintenance matters, and ultimately the board's responsibility is to preserve and enhance the community or your association. So while you're in your board meetings, it's important to stick to these topics. Also governance, the association or the board of directors governs your organization through its governing documents, through its declaration, its bylaws, house rules, oftentimes at resolutions as well. So they are tasked to enforce these rules and oftentimes a board meeting is a good setting to discuss these policies, possibly adopt new policies or update these policies for your association. It's also a forum to basically promote communication or promote harmony amongst the different owners and between the owners and the board of directors. You can implement service programs or encourage owners to be a part of the community by volunteering for association committees that may have a specific topic that needs to be investigated for the association. I would also encourage the boards during this time to continue with your communications to the owners to make sure that you have that sense of harmony with your association. It's also a forum to resolve conflicts between possibly owners or between the association and owners. So it's an appeal process or a forum for open dialogue and communication between you and your owners. If we can go ahead and put the slide on the screen. One item I would definitely recommend to board members current and new is one to review what your obligations are via orientation, oftentimes not oftentimes actually every year new board members are elected to your association's board of directors. Sometimes board members are appointed if a vacancy appears or somebody changes ownership and they have to leave the board because they are no longer an owner. So I would recommend for new board members and current board members to on an annual basis really review what your roles and responsibilities are to make sure that you're staying up to date with all of your different tasks and responsibilities and to make sure that you are have a clear understanding. So a couple of the items on the slide that's on your screen are the roles and responsibilities of the board of directors. So just as a reminder to board members that you do have a excuse me a handful of responsibilities or obligations to fulfill when you are sitting in the seat of a board member, you have your fiduciary responsibility or fiduciary duty, which is made up of a number of items such as a duty of diligence. Essentially, as a board member, you need to make sure you're acting a reasonable manner like any any prudent person would under similar circumstances, you need to do a duty of good faith, you need to be honest with your dealings and make sure that you're not out on the board for self interest or to promote any kind of self interest or any kind of personal profit of when you are sitting on the board. You have the duty of loyalty again, which is really actually and I let me correct myself that's to make sure that you have the interest of the association in mind and not your personal interest. So no making secret profits in regards to when you are sitting on the board. You have your duty of obedience that you should not you should follow the laws and their associations governing documents that have been established for your association. There is the business judgment rule, essentially that kind of incorporates or would look at you know, did you perform certain duties that any reasonable person would do. There are a number of items that they would consider if something ever were to transpire that may adversely affect you or your association as a board member. And they'll look at, did you fail to act in good faith when performing your duties. Did you fail to act in a reasonable manner that another reasonable person may consider in the best interest of the association. And did you look up for the best interest of the association in your decision making process. So back on your slides, you'll note that there are a number of different officers that are obviously part of the association's governor excuse me a board of directors. You have your president or your chair often times of your chair of your board of directors meeting who is the president of your association but chairs the board of directors meetings. So what is the role of the presiding officer, essentially they open the meeting on time hopefully that you will have a quorum, they announced the presence of a quorum and establish the quorum in order to conduct business. They establish the meeting agenda and what items need to be discussed on your meeting. They set the agenda with some help of the other members of the association or board of directors and governing excuse me a property manager. They keep the focus the discussion focused again oftentimes what I'm seeing during this whole COVID-19 pandemic is that the discussion is not staying focused on the agenda items. It is recommended that you put actionable agenda items on to your agenda. So the role of the presiding officer or board presidents essentially is to keep that wandering discussion or that confusion off the table, you know, bring the board members attention back to the motion at hand. And they keep they should be keeping the the meetings from becoming unreasonably long and we'll be touching on the possibility of having a timed agenda where the board may want to consider establishing a timed agenda to keep those items on track. If you will refer to my slide again, you will see that there are obviously the president we discussed the presiding officer we discussed the vice president essentially steps in for the president when he or she is no longer there. The secretary they have some duties such as reviewing the governing excuse me reviewing the minutes prior to approval, signing minutes, signing documents for the association. The treasurer has a responsibility to review financials depending on the resolutions or policies that you have in place may be authorized to perform certain additional duties such as investments and they review and sign the the association's tax return tax returns. The role of the managing agent and onsite manager. That is another duty or essentially as a managing agent or an onsite manager. We act as support staff for the board of directors. And we also act as professional advisors, oftentimes we have quite a bit of experience related to the conducting or managing of associations and how to handle a certain task and duties that may arise that the board needs assistance with. I would say board members it is important to remember that there should be a chain of communication that is clearly defined and possibly even a policy. I have had some associations where they have a code of conduct where it clearly defines how the communication should work between the board of directors and the managing agent and the board of directors and the onsite manager to make sure that there's a clear definition or clear chain of command so there's no confusion in regards to what tasks are being accomplished. Next slide. Some items that you should probably consider prior to the board meeting is involving key players for your meeting preparation. For example, obviously the managing agent and the board president and the committee chairs should oftentimes have a decent amount of say or should be involved rather with the drafting of the meeting agenda prior to the meeting and make sure that those meeting agenda items are actionable items prior to releasing it. Again, a board meeting is a forum to take action for the board of directors to take some kind of act or make some kind of decision that moves the association or the decision making process along. Making sure that these key players are involved will help make your meeting more efficient because unexpected items may not pop up during the meeting so make sure those key players are involved during the preparation of your meeting agendas. In addition, make sure that they have their information ready prior to the meeting. Make sure that they have their written presentation and their recommendation in writing and prepared prior to the board meeting. Back on your side, there are just a few items that are fairly standard for all property managers and board of directors to expect is to have in advance the agenda, the meeting minutes, the financial slash a treasure report, committee reports and supporting documents. Again, put those out in advance at least a week preferably in advance so that the board of directors can have an opportunity to review and think about what their position may be with certain decisions before them. On your next slide during the meeting, again, going back to the possibility of creating a timed agenda. Again, these meetings that are lasting two, three, four hours become unreasonable, especially if you're starting your meeting at 6, 7 o'clock at night. They may be running until 10, 11 o'clock at night. People lose interest. It's the dinner hour. One recommendation may be to have a daytime meeting. People have careers and obligations so people tend to be a little bit more efficient during the day than they are in the evening time when they're tired or may have family obligations to fulfill. Some other suggestions that are widely utilized but not always is during the owner's forum on your meeting notice, advise owners that if they want an opportunity to address the board with some topic, that they submit those comments in writing prior to the board meeting. Why is that important? Number one, it gives the board an opportunity to review what the concerns or comments may be from the ownership. Number two, it gives them an opportunity or the property manager or onsite manager an opportunity to investigate what the issue may be and finally number three by getting it in writing and have an opportunity to investigate it, that owner will actually be able to receive a response most likely at that board of directors meeting. If they don't submit their concern or suggestion or comment in writing prior, that owner may not have the opportunity to hear what the answer is during that board of directors meeting because the board has not had an opportunity to investigate that matter. Going back to the slide, again, one thing we've already kind of touched on was just the presiding officer keeping the group moving, focusing on the decision making process. Stick to the agenda, again, with the COVID-19 pandemic, we're getting sidetracked. Several discussions are being had at one time, so stick to the meeting agenda. It would be highly recommended that you establish remote meeting rules to help with the process of the meeting, remote meeting process just to keep the meeting moving along swiftly and orderly. Another item, obviously, always that is in place with the remote meetings now but has always been in places utilizing parliamentary procedures or parliamentarian procedures during your meeting. Why is that important? Because it keeps order. A board should consider the business at one piece of business at a time, so it keeps order during your board meeting. Courtesy, the rights of individuals should be respected and protected. Majority rules, as everybody is well aware, you need a majority to make any kind of decision. And it's a forum to keep decorum. Any comments should be directed to the chair. The chair should recognize you prior to speaking with the remote meeting rules that are now in place. It's actually sometimes you have to raise your hand remotely utilizing Zoom to be recognized because the meeting rules might have everybody muted. And if you want to be recognized, you have to raise your hand or in the chat box so that you would like to be recognized by the floor in order to make some kind of comment. That being said, we will take a short break here for a minute or so and we will be resuming our discussion about effective hour meetings here in a second. Welcome back to Kondo Insider for this week's episode of running an effective one hour board of directors meeting. We have touched on the roles and responsibilities of the president, vice president, secretary and treasurer, the role of the presiding officer of conducting your board of directors meeting to keep you on task during the board of directors meeting. And we have touched on basic reasons to utilize parliamentarian procedures to keep your decorum in order and to stay in order, stay on topic of your agenda items. That being said, it is always moving on from those topics. It is always recommended that the different officers, if they may be providing a report or the community is providing a report that they provide that information in writing prior to the board of directors meeting. So on your next slide of conducting a board meeting, it's refers to financial review and treasurer's report. That being said, obviously the managing agent is providing a financial report that sometimes depending on your association's size, maybe about an inch thick or maybe just a number of pages. That being said, to keep a meeting moving on efficiently, I would recommend that a treasurer put a report in writing, highlighting the different aspects of your financial documents. Specifically, what is the association's estimated net worth or owner equity that is found on the balance sheet, which is made up of the association's total assets. And when I say total assets, I mean your operating accounts, your reserve accounts. In addition, on the written report, I would recommend that they look at the year to date actual budgeted operational revenues and expenditures versus the actual revenues and expenditures. Identify where the variances are, provide a short explanation of why those variances may be there. In addition to the year to date figures, I would recommend on your written report that you include the monthly variances in regards to revenues, where the maintenance fees collected less or more than was anticipated, which line items on the expense side came in higher or under than anticipated. That should be a reoccurrence on your monthly financials. Another item that I think makes things run smoothly and more efficiently during a board meeting, on your treasurer's report, itemize your different investments that you may have in regards to what you have invested in different CDs or certificate of deposits or CDARs or money markets. Identify when the maturity dates are the interest rates. Why is it important or more efficient to identify that? Because it allows you to keep track of that and when the time comes to roll over those CDs, it is clearly defined in that written treasurer's report at the board of directors meeting. That being said, in order to keep meetings more efficient, I would recommend that if it's not already in place, that the association establish a policy or resolution for investments that may authorize the treasurer along with the president or the treasurer along with the finance committee to essentially review those investment options when they come due and have the authority or decision-making power to either reinvest those funds or to keep those funds liquid if needs be for future capital expenditure. So, in order to keep your meeting efficient, I would recommend that you do have an investment policy in place. If you don't have an investment policy in place, having the certificate of deposits and CDs itemized in your treasurer's report will keep the items condensed and concise and be able to make those decisions fairly rapidly. If you do have to invest CDs, make sure you have a spreadsheet available that shows the different terms and the different interest rates that may be available at that time just to keep the meeting running efficiently. Moving on to the next slide that has been prepared. Oftentimes, in the board meetings, discussion just continually goes on and on and on without any kind of decision being made by the board of directors. That being said, to keep your meeting to an hour or to keep your board of directors meeting efficient, number one, make sure that those committee reports are in writing prior to the board meeting. Make sure they're included with the board packet that the board receives one month, excuse me, one week in advance. The details of the topic should be discussed at a committee level prior to presenting anything to the board of directors. Clearly identify in your written report what recommendation or what action you would like the association or the board of directors to take. Again, if the committee is not ready to formulate a recommendation or request for the board to take action on, it should remain at that committee level until that recommendation has been formulated. Or in some cases, if the committee needs additional information from the board, it may go to the board again. But I would suggest that if the topic is not actionable or if the committee has not formulated a recommendation that they should keep it at the committee level until that recommendation has been formulated or finalized. And when providing your written committee report, provide the backup in regards to, you know, did you review a number of proposals in regards to maybe some topic that you're investigating? Why did you make the decisions that you did? So provide backup to the board of directors. So when it comes to the time for the decision making process at the board of directors meeting, they have had an opportunity to review one year recommendation, but to how you formulated your recommendation and what information you referred to. Again, if the association or excuse me, the board of directors is discussing an item and they prolong the discussion, I would recommend that the chair or the president presiding officer form an ad hoc committee and appoint a chair of that ad hoc committee to investigate the specific topic that may be discussed at the board. Again, the purpose of a board of directors meeting is to make decisions. The discussion aspect of it, the investigation aspect of it should be done at a committee level and once the committee has formulated a recommendation, then it is provided to the board of directors for action. So again, try to avoid lengthy discussions about certain topics and if possible defer those items to an ad hoc committee for further investigation. Moving on to the next slide, your unfinished business and new business items. Rules possibly should be established to limit informal discussion. Again, just going back to the COVID-19 pandemic, the board meetings are lasting much longer than they used to. So I am often seen that the rules are being established to allow or permit up to a five-minute discussion of just informal discussion prior to one, either requiring a motion to continue the discussion on a certain topic or to just moving on to this topic. So I would recommend that the boards that you review your meeting rules and make them applicable to remote meeting rules. Make a motion to continue that discussion or just defer it onto the next meeting or defer it to an ad hoc committee for further investigation that will report back to the board of directors. Again, to avoid lengthy meetings, again, revisit your rules, possibly limit the amount of time an individual can speak regarding a topic. Maybe it's just two minutes per speech and then also that individual may only be able to speak twice on a specific topic. Oftentimes we see that someone may be very passionate about a topic. So limit the amount of time they can speak and the number of times that an individual can speak on a specific topic. Identify agenda items when presiding officers and property managers when you're performing or excuse me when you're creating your agenda for your board of directors meeting. If there is an agenda item that you know will not have any action taken at that board meeting, identify it prior to the board meeting. Identify it on your meeting agenda. Have the topic that may be under unfinished business or new business have the topic and then right after maybe just say a table to the next meeting or deferred for further investigation and at during the meeting process you can just skip right over that agenda item because you know you don't have any action to take on that specific agenda item. And finally, after your board of directors meeting which is your last slide, make sure that the everyone, the committee members, the treasurer or the property manager, your onsite manager has a clear understanding what needs to be accomplished prior to the next meeting to avoid any kind of rehashing of the same topic or same points about a specific topic. Just make sure that everybody has a clear understanding. It's possible during the board meeting that you set deadlines for these written reports to be submitted so you can provide those to the board of directors one week in advance of the next board of directors meeting again so they have that opportunity to review those different topics that may be discussed and maybe requested to take some kind of action on at the next board of directors meeting. Again, provide your onsite manager and your community association manager actionable items and my role as a property manager and onsite manager we need to make sure that we are timely with any kind of action that is requested of us so that again we're not rehashing any kind of the same topics over and over and over again. Someone in my position as a property manager is key to draft the minutes timely. I'll provide those to the board of directors for review to make any kind of corrections and so that people can have a reminder of what kind of topics or what their objective is between the board of directors meeting. I would just suggest that in between board of directors meetings limit the decision-making process as much as possible try to make decisions in a board meeting to allow maximum participation between all board members. Sometimes emergencies do arise and decisions need to be made outside of a board meeting most likely via email. I would highly suggest that if at all possible make those decisions in the board of directors meeting but if it is an emergency and needs to be made outside of a board of directors meeting make sure that is put onto the meeting agenda for the next for the following month and that you ratify that decision that was made outside of the board meeting to make sure it is recorded in your minutes. Your minutes become a legal document and will be referred upon over and over in the future by the current board and future boards. That being said that is our brief review of how to run an efficient and effective one-hour meeting and thank you for your time and we will see you next week at the condo insider aloha.