By: Helsing Admin
[NOTE: This article is Part VI in a series where each article builds on the previous articles. We recommend you start with Part I first.]
Principle 8 – Policy Specificity: Arrange Policies by Size
When creating policies, the board begins by determining the broadest values first, then proceeding to the smaller ones
The Board must ensure that each policy it creates has a level of specificity required to sufficiently state the expectations addressed by that policy. That is, the values communicated in policies need to be specific enough without being too specific.
The advantage of stating values broadly is simplicity; a broad statement is inclusive of all related smaller statements. However, the broader a statement is, the greater the range of interpretation that can be given to it. Principle 8 enables boards to control how “open to interpretation” each policy is.
The board determines the broadest values for a topic area, then determines whether it would be comfortable with any interpretation that is reasonable. If the board would be uncomfortable delegating such a wide range of interpretation, it must define its words more narrowly, moving into more detail and specificity one level at a time. That continues until the Board reaches a level of specificity where any “reasonable interpretation” is acceptable – this is the point of delegation.
Principle 9 – The Board’s Connection with Operations
The manager is the link between the board and operational staff/activities
The Board should have a single point of delegation and hold this person accountable for meeting the board’s expectations for organizational performance. In a homeowner association, that point of delegation is the community manager.
The manager should be viewed as the board’s primary liaison/representative; any influence the board needs to have over operational activities or staff/vendors should be exercised through the manager. This works because through the combination of Ends and staff Means policies (aka management limitations policies), the manager is given the authority to make decisions consistent with these standards for operations.
Principle 9 recognizes the integral need and importance of effective delegation.
For the association to be productive, the board must effectively delegate to the manager, and the manager must effectively delegate to the staff and/or vendors.
Part of effective delegation is ensuring that a given task or authority is not delegated to multiple people. Consider the examples below.
– If given explicit authority by the board, committees can be very effective in carrying out certain board decisions – as long as the board does not give the committee authority that overlaps that delegated to the manager. If one job is delegated to two people, it is not clear who’s responsible.
– California Corporations Code 7213.a requires that there be a “treasurer or chief financial officer.” But it leaves definition of the role to the governing documents of the association. If those documents include provisions that describe responsibilities also held by the manager (e.g. “day-to-day management of finances”), delegation won’t be clear.
The Consent Agenda
It is legally required that the board act on many issues that are more effectively delegated. Accountability for these issues can be accomplished through a “Consent Agenda.”
A Consent Agenda, also called a “required approvals” agenda, is a board meeting agenda whereby the board acts on issues that are delegated to the manager for implementation, but which the law requires the board to act upon. Although criteria for what qualifies to be on the Consent Agenda vary widely, it is generally agreed that Consent Agendas are best used to act on “required approvals” dictated by statute.
Board members should still appropriately scrutinize and consider Consent Agenda items prior to the meeting and verify that the manager’s actions/decisions are compliant with board policy. If there are concerns, these should be brought forth, moving those items from Consent Agenda to open discussion. However, most boards find that as long as it is substantiated that policy criteria are met, they are able to greatly expedite discussions while fulfilling legal mandates and exercising effective oversight.
Continue to Part VII
The Policy Governance Series draws heavily on John Carver’s service marked endeavors and much of the Homeowner Association model relies on and is reproduced with permission from and is Copyrighted by The California Association of Community Managers (CACM). Articles are for advertising and general information by The Helsing Group, Inc. They are not intended to provide legal advice, but rather reflect our opinions as Community Association managers and Consultants. Readers should not act on issues raised in our newsletters or websites without consulting legal counsel.
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[i] Policy Governance® is a registered service mark of Dr. John Carver. The authoritative website is www.policygovernance.com