Executive Committee Excellence

• Overview – Executive Committee (EC): What is it?

– Roles and responsibilities

– Delegated functions

– Liability

– Dysfunctional ECs

– Best practice ECs

– Recruiting, developing and retaining productive members

– Best practice meetings

What is the Executive Committee?

• A group of people elected by the Owners Corporation responsible for day-to-day decisions concerning the management of the strata scheme.

• Elected at every Annual General Meeting (AGM)

Who can be on the Executive Committee?

• An owner (does not need to be financial)

• Company nominee of a company that is an owner

• A non-owner that is nominated by an owner that is not standing for election (e.g. tenant)

• Co-owners can only be nominated: – By another owner that is not co-owner of their lot

– By their co-owner provided they are not standing for election

Executive Committees: The basics

• EC is limited to nine (9) members

• The three (3) office bearer positions are:

– Chairperson

– Secretary

– Treasurer

• A member can hold one or all of the office bearer positions

Executive Committee: The basics

• No requirement to hold a set number of Executive Committee Meetings (ECMs) each year

• Best practice: Minimum four (4)

• Recommendation: Always hold an ECM immediately following the AGM to appoint office bearers

Roles and responsibilities

• Self-managed strata schemes vs strata managing agent appointment

• Delegation of all or some of the responsibilities

• Take back any responsibilities at any time

• The strata manager is not the decision-maker

Roles and responsibilities

• Chairperson

– Chairs all meetings of the EC and owners corporation

– Single vote only – NO casting vote

– If the chairperson is not in attendance the EC must elect a person to perform this role

Roles and responsibilities

• Secretary

– Preparation and distribution of notices and minutes

– Maintaining the strata roll (S108)

– Issuing breach notices

– Convening meetings of the Owners Corporation and the EC

– Replying to all correspondence

Roles and responsibilities

• Treasurer

– Issuing levies

– Provide receipts, banking and accounting for monies paid

– Preparation of S109 certificates

– Preparing budgets and financial statements

Personal liability

• EC’s decision-making power limited by:

– Strata Schemes Management Act 1996

– By-laws of the strata scheme

– Resolutions by the Owners Corporation at general meetings

• Ignoring these restrictions will hold the EC personally liable

Personal liability

• EC’s may be personally liable with regards to:

– Approval of renovations to lots

– Entry into, or termination of agreements

– Acts in conflict of interest

– Defamation

– Negligence

• Office bearers’ liability insurance

Personal liability

• Office bearers’ liability typically excludes:

– Dishonest, fraudulent or criminal acts

– Acts in conflict of interest

– Acts outside the scope of the EC’s authority

– Acts causing death, personal injury or damage or loss to property

Personal liability: reducing risk

• Avoid acting independently of general meeting resolutions…..if in doubt…..call a meeting!

• Ensure the Owners Corporation has appropriate office bearers liability insurance

• Strata managing agent experience can reduce risk

Dysfunctional Executive Committees

• EC members don’t understand their roles and responsibilities

• EC is disorganised or in conflict

• EC members have individual agendas

• History of inactivity

• Negative culture

• Difficulties to remove inactive members

Dysfunctional Executive Committees

• Meetings are undesirable

• Obtaining people’s commitment is difficult

• No recruitment process to attract new members

• Example of dysfunctional EC

Best Practice Executive Committees

• Good governance

– Participatory

– Transparent

– Accountable

• Above and beyond the legislation

– Minutes to all

– Communications outside meetings

– ‘Open’ meetings

Best Practice Executive Committees

• Aware of roles and responsibilities

• Effective meetings

• Code of conduct

• Working parties and sub-committees….share the load

• Active and committed members

• Community…..this isn’t about ‘YOU’

• Live with the consequences of your actions

Recruiting productive members

• Develop an EC profile

• Intangible assets

• Encourage diversity

• Engage potential members year-round

• Advertise roles and responsibilities early

• Manage the nomination process at the AGM

• Create opportunities for non-EC members

Developing productive members

• Clarify roles, responsibilities and expectations immediately after the AGM

• Follow through

• Integration of new members

– Induction pack

– Orientation of common property

• On-line training and continuing education

• Working parties and sub-committees

Retaining productive members

• Effective meetings

• Utilise paper meetings

• Conflict management

• Rotation of office bearers

• Social interaction

• Recognition

Effective meetings

• Planning

• Agenda

– Priorities

– Results

– Participants

– Sequence

– Timing

• Venue

Effective meetings

• Access to timely information

• Start the meeting on time

• Recap terms of communication

• Important dates

• Stick to the agenda

• Stick to the allotted time

• Comprehensive meeting minutes

• Action items

Executive Committee Excellence

• Understand their roles and responsibilities

• Have the best interests of the Owners Corporation as their goal

• Participatory, transparent, accountable

• Above and beyond the legislative requirements

• Establish terms of communication and ‘housekeeping rules’

• Recruit members with the required skill set

• Run effective meetings