Board of directors in a cooperative housing association
Good advice for the board
On this page, we have gathered the most essential information about being a board in a cooperative housing association - about the responsibilities that come with it, how to ensure good cooperation, the tasks you need to be able to solve, and much, much more.
Below you can read about the board's composition, task allocation, and the responsibility that comes with being a board member.
A significant responsibility
It is essential for both board members and the rest of the cooperative housing association to remember that board work is voluntary. Members dedicate their free time to handle tasks in the board. Despite this, board work is associated with significant responsibility - the association's "life," finances, and ongoing operation and maintenance of the property are all aspects that the board is responsible for. We always recommend that boards take out director's and officer's liability insurance.
Board composition and task allocation
We often see that board members who work well together are the best boards. Each member brings something different to the board, and when working together and finding common solutions, it typically functions much better than relying on individuals. The most important factor in assembling a board is, therefore, that members have a good relationship with each other and are committed to the association and community. Once the board is established, it is crucial to identify the tasks the board needs to solve in the coming year and distribute these tasks so that members' competencies are utilized effectively, and no member is burdened too much with board duties. Remember that board work is voluntary.
Supplement with other partners
Very few boards can handle all tasks by themselves. Therefore, our recommendation is to collaborate with partners who can support and ease your work. This may include an administrator, auditor, bank, operational, and construction consultants, etc. Only in this way can your board function optimally.
One of the most important aspects of our work with you is good collaboration and close communication. Only through this can we be a valuable collaborative partner, providing supplementary assistance in the best possible way. To achieve a successful collaboration between your board, us, and your other partners, it is essential to involve us in your considerations when defining the tasks that need to be addressed in the upcoming year (or years). When tasks are identified and distributed, you can also ask yourselves some questions:
How and with what can the administrator supplement the board, and what needs to be coordinated for this to work?
How is the property management organized, and what type of management advice is required to ensure smooth operations?
How is the association's financial structure set up, what tasks does it give the board, and what collaboration is needed with the bank and auditor in this regard?
Which renovation and development projects concerning the association's property should the board prepare for and/or carry out, and what advice and collaboration are needed from a building consultant and administrator?
What other tasks has the board identified, and what advice and collaboration are needed from the administrator, lawyer, auditor, bank, property management consultant, building consultant, and/or other advisors?
Rules of Procedure and Job Descriptions
We would recommend that you write down your considerations about tasks and agreements regarding advice and collaboration as an addition to the Rules of Procedure.
By setting specific frameworks for solving tasks and agreeing on collaboration, it can be helpful to document them as job descriptions for individual board members and/or as a working basis for any working groups.
The framework for the board's work and decisions is flexible. In other words, there is no definitive list of what the board's tasks and competencies actually are. Popularly, it is said that the board should take care of all tasks and decisions related to owning and managing a property. This implies that the board can make all the necessary decisions to make the association function. In this section, we attempt to specify the board's typical tasks, duties, and most importantly, the decision-making authority its members possess.
About the board's scope of action
Looking at it concretely, the board must initiate the necessary initiatives and make decisions to implement the general assembly's resolutions. Of course, these decisions must stay within the association's budget. The board can also make decisions that follow the general assembly's resolution to carry out a project, seek advice, or similar. Again, the budget will limit what the board can decide. A decision at a general assembly should always include at least three elements:
A description of what the general assembly resolves. What needs to happen, and what decisions need to be implemented?
How much will the decision/project/initiative cost?
Where will the funds come from? (Should they come from the association's equity, should a loan be taken, or should shareholders contribute more?)
Decisions that do not include these three elements may be rejected by a chairman, as the general assembly has not been given sufficient information about the extent of the decision.
As previously described, there is no definitive list of tasks that a board should address. To ensure that the board handles necessary tasks, it is essential for them to identify recurring and specific important tasks throughout the year and organize how these tasks will be addressed.
Rules of Procedure for the Board
The board can advantageously formulate rules of procedure that define the board's tasks and distribute responsibilities among its members. Typical tasks for a board may include:
Dialogue and coordination with the administrator.
Engaging in dialogue and problem-solving with shareholders and potential tenants.
Managing and approving share transfers.
Communication with the association's auditor, including conducting an annual accounting and budget meeting.
Monitoring the housing cooperative's loans in credit institutions and banks. If applicable, seek proposals and formulating suggestions for the general assembly regarding loan restructuring – in consultation with the administrator, bank, and mortgage institution.
Continuous monitoring and management of the housing cooperative's finances, including budget follow-ups, payment supervision, and loans, among others.
Monitoring and managing any caretaker/gardener.
Managing and arranging events and meetings, such as general assemblies, meetings with the administrator, weekends' work, and social gatherings.
Monitoring and managing projects, especially concerning the maintenance and renovation of the housing cooperative's property – in cooperation with the administrator and advisors.
Handling ad hoc tasks.
