It's important for every member of a condominium corporation's board of directors to fully understand what constitutes a clear or potential conflict of interest so as to avoid encountering legal or ethical implications. This is essential to prevent litigation and to maintain the board's reputation amongst the community.
Simply put, a conflict of interest is when a board member's personal or business interests interfere with their ability to make decisions in the best interests of the condominium corporation. You probably have a "gut instinct" understanding of what a conflict of interest is. For example, if a board member owns a company that's entered a bid on snow plowing, that board member at minimum, would need to step aside for a vote on that contract. Below are some ways to ensure that board members stay impartial and focused on what's best for the community.
Make board members aware of conflicts
Conflicts of interest are going to happen. Board members are also community members, and the decisions they make will have an impact on everyone. Board members need to be clear about their business interests from the start and anticipate how they come into contact with the condominium corporation.
Have clear rules regarding conflicts of interest
What are the board's rules when it comes to conflicts of interest? If you don't know, it's time you learned. Having clear expectations that board members will recuse themselves from votes that impact their personal or business interests will mean you avoid problems down the line.
Understand your duties
Board members should regularly review possible conflicts of interest on every major decision. It's crucial for board members to understand that their stewardship of the community is their first responsibility during meetings and when casting votes.
Be aware of budgetary impacts
Because board members are also condominium corporation members, this means their personal views as homeowners could color their decisions as board members. For example, if a board member personally hates paying fees for community elements that they don't use, then that board member has a conflict of interest. A board member who flatly votes against every fee is thinking of their own financial interests, rather than those of the community as a whole.
Be transparent about conflicts
Potential conflicts of interest should be discussed in open meetings and recorded in the minutes. This way it's clear to homeowners that board members are acting in a responsible way and putting the needs of the condominium corporation first.
If you need professional property management, then Imperial Properties is here to help. Our loyal customer base trusts us to deliver effective condominium and residential management. We do it all, from budget planning to providing effective board management. Imperial Properties has the capacity to serve our diverse and growing client base throughout Western Canada. Contact us today to learn more about the invaluable help we can offer your condominium community, multifamily residential property or commercial property.