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