Estate Living Magazine Investment - Issue 34 October 2018 - Page 50

San Lameer Effective DIRECTORS AND TRUSTEES Most companies and HOAs strive to appoint a board of directors that will be competent and effective in providing leadership and good governance but, in my opinion, vested interests and limited stakeholder perspectives often reduce the long-term effectiveness of their efforts. efforts. Directors are meant to provide strategic direction; make major decisions; exercise oversight and ensure good governance (statutory requirements, company constitution and fiduciary duties) and put in place policies while acting honestly and exercising reasonable care and skill. A constructive approach to appointing effective directors is to consider their ‘maturity’ in the context of the vision, goals and culture of the company. The maturity of a director can be seen as consisting of two components: Technical capacity is self-evident, but stakeholder perspective is more subtle, interesting and difficult to measure. One way of describing stakeholder perspective is to see the stages of awareness as a continuum from ‘no idea’ to transformational leadership. Maturity Level 1 This person has no or little experience, tends to be passive, without views on most issues, and often volunteered to serve as director because of ‘the barking dogs and speeding on the estate’. • • 48 | The technical capacity (qualifications and experience) to perform the role. This applies particularly where directors are expected to chair portfolio subcommittees of the board. For example, it is best to appoint a director with financial management qualifications and/or related experience to chair your finance committe. Maturity of the perspective they hold about stakeholders. Maturity Level 2 This person joined the board to promote and protect their own personal interests on the estate. They plan to start construction on their property, so they join the board to try to influence matters in their favour (like building rules and restrictions). They have strong opinions, always favouring their personal interests, and little interest in estate issues affecting others.