The relationship between boards and management is, by its very nature, a deep one. The two teams rely on each other to ensure the smooth oversight of their co-op and condo communities. Both are dedicated to doing everything possible to create a stable and welcoming environment for residents while at the same time, handling the day-to-day and big picture aspects of management, from dealing with vendors to ensuring a solid financial bottom line. With so much at stake, it is vital for everyone involved to be functioning at an optimal level. For boards and for the managers who work with them, building that well-oiled management machine is key to that success. So what can be done to ensure the best relationship possible and how does one know if it’s not going to work? That’s where evaluations come into play.

Performance Specifications

For most management firms, the process of managing agent evaluations is an internal one based on the specific needs of each client. “The management agreement should outline the responsibilities of the management company,” says Jim Stoller, president of The Building Group property management firm in Chicago. “There should be a specific job description for each building. Every building is unique so you want to customize that description for each one. We use those descriptions as the basis for our evaluations.”

Establishing those expectations and guidelines early is imperative, says Marcia Caruso, president of Caruso Management Group, Inc., based in Naperville, Illinois. “The first 90 days are critical to discussing expectations,” she says, because sometimes what the board thought they heard and what was said can be completely different from what management thought they heard and what was actually said. “You need to establish expectations early,” says Caruso.

Taking the pulse of that relationship on a regular basis is also key. Every month, Caruso’s firm examines the management report from each building and also sits down every quarter with each building’s board “to find out which expectations are being met and not met,” Caruso says.

She also suggests routine discussions with managers, board members and vendors so that they can get all the major players “on the same page. Together, we can tell the vendor what we’re happy about and not happy about.” Once the board sees that the manager understands what they want and can anticipate that response, “pretty soon the board starts to trust your judgment,” Caruso says. “When I hear the board say they trust us to take care of something, then that’s a good thing.”

Managers who assess on a constant and consistent basis often have the best understanding of where they stand with their boards. “We have found that the best manner in which to assess performance is a weighted combination of three drivers: homeowners, board members and company,” says Patrick Kennelly, CEO of Phoenix Rising Management Group, Ltd., based in Chicago. “We conduct an annual online survey of the ownership. Among other questions about the association, we can solicit specific feedback on how our assigned agent and we, as the management company, are performing in different areas such as responsiveness, technology, timely resolution of issues and cleanliness of property.”

In addition to working with the individual co-op and condo boards and associations, management firms will conduct internal assessments of their agents. “The manager’s supervisor plays an active role conducting performance reviews with the board of directors,” Kennelly says. He adds that his firm also rates their managers “internally against professional standards such as communication skills, punctuality, deportment and ongoing education. We also take into consideration contributions against company goals and objectives.”

Stoller’s firm also takes an aggressive approach in ensuring top-quality standards among its agents, and that includes making sure that management has the training and skills they need to compete in a very fast-paced and always changing field. “Our supervisors meet with our managers to discuss issues and provide support,” he says. They also have monthly meetings with experts in different facets of management, from accounting to engineering. Ongoing e-mail blasts to staff address new regulations and his firm works with CAI to take part in professional training opportunities. “We try to give them all of the tools they need to do their jobs,” says Stoller.

A Two-Way Street

Stoller’s firm recently introduced a new program called First Tuesdays for its boards, in which they bring in lawyers, alderman and other experts to discuss their specialties and provide training and insight for new and long-term board members. This ties back to the importance of expectations. Well-informed board members and well-trained managers will often have the best relationships for the simple reason that they both have reasonable expectations of the other.

“It’s important for boards to understand that management is part of their team,” says Stoller. “We’re there to support the board and give them the expertise they need to act in a timely and effective way. A big part of management is to make the board’s job easier. It’s important, though, to have realistic expectations and a fair and honest relationship.”

To that end, Stoller’s firm provides board training. “We go through the board and what the responsibilities are of each position and what the expectations are of each position,” he says. “Education and communication are key” so that everyone knows “the who, what and where” of the combined board and manager efforts.

If Things Go Wrong …

Sometimes, despite all best efforts, things may go awry between the association manager and the board or a manager and a resident. On those rare occasions, it is imperative to handle the situation directly and without delay. “The board and homeowners are our clients, and we do not want to add to their burdens,” says Kennelly. “A board representative should raise any issue with the manager’s supervisor who will then identify and focus the appropriate resources on eliminating the point of friction.”

“If something goes wrong,” Caruso says, “the board needs to discuss it with me. Senior management staff need to be monitoring everything. If you don’t, things can get away from you so quickly. You have to stay on top of it.”

Stoller agrees. “If there is a problem, we will work quickly to address it.” And often, it’s a situation that can be corrected with a little extra guidance. “If we find the agent needs help, we’ll provide additional training and support,” Stoller says.

That is one key point made by both Stoller and Caruso: no one person knows everything. A managing agent can fall short of a board’s expectations simply because that individual may be lacking in either experience or training in one or two areas. “If someone’s good at financials, but not boilers, we’ll provide extra support in that one area.”

Among the red flags that can indicate trouble are “homeowners who show up at meetings and say their calls aren’t being returned,” says Caruso. “Communication remains the number one expectation not being met for most communities. Or you might see something that’s not being maintained—that could be a sign that the agent is not looking after a vendor. Whatever the cause, little things should be looked after.”

Managers also agree that the best way to solve a problem is to avoid it in the first place. “If you wait for red flags to alert you that something is wrong, it is often too late to recover,” says Kennelly. “It is very important for key leaders to engage the board on a routine basis. A simple cup of coffee, utilization of an annual survey or feedback provided to a supervisor during periodic performance reviews is the best manner in which to ensure we’re fulfilling client obligations. The best practice is to anticipate factors that put an association under pressure: a large capital investment project, lawsuit, special assessment or turnover on the board. Identifying key stress factors allows us to adjust a manager’s workload so they can drive more communications with the ownership and increase communications with the board.”

Kennelly suggests that boards should be looking at a number of areas to gauge performance, including “the ability to provide quality vendors at reduced hourly rates to the market, budget execution, leveraging of volume business to reduce operating costs, homeowner satisfaction, contract oversight, responsiveness, communication skills and resolution of board priorities,” among others.

Working Together

Still, perhaps the most important keys to a solid and long-lasting relationship between a co-op or condo board and its management team are realistic expectations, education and a steady flow of communication. Caruso’s agents will walk the properties each year with board representatives to ensure things are running smoothly and at the same time, will examine financials and long- and short-term goals each quarter. “If you do that on regular basis, you’ll find that 98 percent of time people are satisfied.”

It is vital, too, to remember that everyone, whether manager, board member or resident, is working toward the same objective: creating an exceptional place to live. “We’re all working toward the same aims and we’re on the team together,” says Stoller. “Our only goal is to do a great job for the client.”

Liz Lent is a freelance writer and a frequent contributor to The Chicagoland Cooperator.