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Diversifying Your Board Practicing and Prioritizing Inclusivity

Diversifying Your Board

A democracy fares best when its governing bodies are proportionally representative of its constituents – regardless of scale. Much like federal, state and local governments, community association and condo boards are democratically-elected entities, and like those larger bodies, should strive for proportional representation of the residents they seek to govern. 

Similar as they are, a key difference between holding public office and holding a board position is that fewer people are clamoring to do the latter. Association board members are almost always volunteers who are taking time away from their careers or families to serve the interests of their community or building, and the job requires a fair amount of commitment for not a lot of rewards. Looking for a contender to fill an open board slot can often be slim pickings – in which case the first warm body to take the role sometimes just has to do.

This all raises several questions: How important is it for a board to accurately represent the demographics of its owners? How likely are boards across various markets to be adequately representative? Who is most likely to run for board positions in general? Who is best positioned to encourage increased board diversity and how can they go about it?

Defining Diversity

In order to frame the discussion, it's worth reviewing what diversity means today, and how the term has evolved over time. 

“Fifty years ago, when people in the U.S. spoke of diversity on corporate boards of directors, they were likely most commonly referring to either race or gender,” says James Erwin, Founding Partner of Erwin Law, LLC, in Chicago. “Now, the term encompasses a significantly broader spectrum of factors: gender identity, socioeconomic status, religious affiliation, sexual orientation, political affiliation and age, among others. 

“Associations are managed by boards, and the directors that sit on those boards should consider these diversity factors in their management decisions,” he continues. “The larger an association, the more likelihood that diversity will play a role in the operations of the association. For starters, because the board is supposed to represent the entire association constituency, the greater the diversity among its directors, the more likely they will be to actually reflect the various perspectives of the ownership that they represent.”

Beggars Versus Choosers

Perhaps the biggest impediment to recruiting a diverse board is simply the fact that too few individuals are willing to step up and serve on their boards. When the candidate pool is that shallow, associations can find themselves taking on whoever shows up.

“In Nevada, where I'm based, it is pretty much 'take what we get' when it comes to elected board members,” says Anne Calarco, President and Managing Partner of Level Property Management in Las Vegas. “All board members are volunteers, and as such there is no real criteria or requirements to run, other than to be an owner within the HOA and to be familiar with the governing documents. But, whatever their reasons for running, we as community managers must try and build the process of bringing the board together and moving in a positive, productive direction that benefits all owners. This is why we provide board training and support the board in its approving of activities and events that interest all in the community, and that allow residents to come together and to know one another.”

The means by which a board is elected can also be a hurdle in promoting diversity. “In the condo association realm, a piece of paper goes out 60 days before an election announcing that the members can run, but there may not even be a discussion, let alone a 'meet the candidates' night,” says Shari Wald Garrett, an associate at the law firm of Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, PA, which has offices in Florida. “In these scenarios, whoever gathers the most friends to vote for them is going to be who sits on the board. Or some owners could just be picking the first six names on the sheet, or their neighbors, or a name that they like. And neither board nor management can endorse a candidate.

“Let's say that I sat on a board and I thought that it was too heavily sided toward a particular demographic, and that there was another rising population that was not being represented,” Garrett continues. “The board can't say, 'We need more of the latter,' because then it's discriminating. An individual board member can suggest, based on that board member's own individual capacity, that another resident run [for a seat on the board], but the member cannot do so in any board capacity, and it is out of management's hands.”

Old Guard

In many cases, boards consist heavily of those residents who have lived at a property the longest. As they've spent much of their life both emotionally and financially invested in an association, they feel more capable to and concerned with shaping its future.

“My experience in dealing with boards that were established in the Seventies and Eighties or earlier is that they are often more reflective of the residents who have lived in the association for many years, and are in the most part older and either 'old money,' or those who are now living on more fixed incomes,” says Sandra L. Jacobus, a partner in the Real Estate Transactions and Cooperative and Condominium Association Housing practice groups at New York City law firm Ganfer Shore Leeds & Zauderer “In both instances, these board members do not share the concerns and priorities as the new shareholders, who tend to be younger and more affluent, or are at least wanting to spend more money on amenities and favor permitting bank financing in previously 'all-cash' buildings, or lowering the amount of the cash requirement.”

In addition to the above, Matthew J. Leeds, who is also a partner at Ganfer Shore Leeds & Zauderer, notes a dearth of women holding board positions. “With one major exception, I have personally found that the constitution of a board has been reflective of the population of the building,” he says. “But that exception is gender. I have observed that overall, boards do not seem to include women in proportion to the makeup of the building. Based on population, you would expect it to consist of about half. I'm not sure if others have had this experience as well.”

Mixing It Up

While the board and management of an association may not be able – or willing – to actively push to diversify representation, that doesn't mean that members of an association are powerless to ensure that everyone has a voice.

“Tackling this problem begins with education, innovation and transparency,” says Erwin. “Boards should make an effort to educate the owners about what the directors do, and how that work affects those owners' daily lives. Proactively keeping them informed is often the best way to get them engaged in board matters, which will in turn get them to step up and volunteer for the job.”

Much of the responsibility falls to the individual. One cannot lament the homogeneity of their board from the sidelines – because after all, a board will not simply diversify itself. “You, as an individual member of the association, have to market yourself,” urges Garrett. “You have to go door-to-door and get your name out. Everyone has that opportunity, but the onus falls to the owner.”

“I often counsel board members to be open and transparent when dealing with the issue of diversity,” Erwin adds. “If the board clearly lacks diversity, they should make this known to the owners. For example, if a board is made up of mostly elderly folks in a community with a lot of younger owners, the board would be wise to bring this to the attention of the ownership. We often forget that, particularly in larger associations, owners only see the names of the directors, and have no idea whether or not any of them actually represent their personal perspectives. There is nothing wrong with telling the constituency that the board would welcome greater diversity, and that a more diverse pool of applicants to the board at the next election is encouraged. In fact, in the instances where I have seen boards circulate such an invitation and notice, the ownership has responded positively and with appreciation for the fact that the directors were honest and open about that lack of diversity.” 

Mike Odenthal is a staff writer/reporter for The Nevada Cooperator

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