Essential Steps to Becoming a High-Performing Board

Essential Steps to 

Becoming a High- 

Performing Board: 

Governance, Rules, 

Meetings and Finances 

This guide explains the 

key components that are 

necessary to operate as 

an effective board.

Essential Steps to Becoming a 

High-Performing Board: 

Governance, Rules, Meetings and Finances 

High-performing boards do not just collaborate and operate perfectly overnight. 

As a group of volunteers — made up of new members who are often learning about their 

roles, and long-time board members who might need a refresher on the basics — boards 

need to be developed into efficient teams that improve their communities. 

As outlined in the guide, Developing a High-Performing Board: Alignment, Planning and 

Training, to be effective, board members should first align and create a community vision. 

But once the board understands the scope of their roles and is aligned on goals for the 

community, how do they go about governing? 

They should begin executing their plan for the community by evaluating existing policies 

and adopting new policies if necessary. But before they proceed, they need to know the 

bylaws and covenants outlined in their governing documents, the rules and policies 

of the community, how to conduct meetings and how to review finances to gauge the 

community’s financial health. 

All these factors affect what policies they will adopt, how they will support the community 

and what projects they will execute. These steps are pivotal for their success and to 

perform as an effective board. 

With a clear outline of what their roles entail, what rules apply to the property and 

what operating principles apply to the board itself, board members can drive their 

community forward. 

This guide is an in-depth look at the following key components that are 

necessary for all members to be familiar with how to operate as an 

effective board: 

» Governance 

» Finances & 

» Rules & Policies 

Reserves 

» Meetings 

CONTENTS 

Governance & 

Governing Documents 

1 

Rules & Policies 

Meetings 

Finances & Reserves 

2 

3 

4

FIRSTSERVICE RESIDENTIAL GUIDE 

Governance & 

Governing Documents 

When new members join the board, 

they must familiarize themselves with 

the community’s governing documents, 

which give the board structure and the 

ability to govern, guiding them through 

operations and laying down regulations 

for the community. These guidelines 

also drive the board legally, making sure 

that they stay within the parameters of 

municipal ordinances, state statutes 

and federal laws. 

The governing documents also serve as 

a guide to the property management 

company that partners with the 

community. They’re also a reference for 

residents or homeowners, who often 

question why specific rules and policies 

exist in the community. 

The governing documents may include: 

» Articles of Incorporation: 

Corporations and developers must file 

articles of incorporation to operate in 

the United States and Canada, and 

the board must include that filing 

within its governing documents. They 

establish the community as a nonprofit 

mutual benefit corporation. The 

articles of incorporation must be filed 

with the state that the community 

is registered in and define the 

association’s legal name, address and 

corporate status. 

» Rules and Policies: The governing 

documents outline how the 

board must adopt new rules and 

regulations. Rules and policies 

provide a standard framework for 

all residents to follow and preserve 

property value and resident lifestyle. 

Rules usually include communityspecific 

policies such as parking, 

pets, noise complaints, trash and 

recreation/common areas. All 

regulations must stay consistent 

with the governing documents, and in 

some cases, cannot be established 

without a homeowner vote. Before 

a board implements new rules 

The governing 

documents also 

serve as a guide 

to the property 

management 

company that 

partners with the 

community. 

3 | Essential Steps to Becoming a High-Performing Board: Governance, Rules, Meetings and Finances www.fsresidential.com


or revises existing ones, they should get 

feedback from their attorney to ensure that 

the new regulations are compliant with state 

laws. 

» Declaration: Sometimes called the 

proprietary lease, master lease or occupancy 

agreement, this document governs all aspects 

of the relationship between the community 

and the residents. It lists the residents’ 

rights, occupancy and subletting privileges, 

maintenance costs, factors for default or 

termination of the lease and rules for selling 

shares. It also contains the covenants, 

conditions and restrictions (CC&Rs). 

» Covenants, Conditions and Restrictions 

(CC&Rs): While rules and regulations can 

be changed easily, any modifications to 

CC&Rs require a board vote, and then they 

must be re-filed with the state. CC&Rs 

establish residents’ rights and the rules 

that pertain to the land the community 

was developed on, outlining architectural 

standards, assessments and lot and property 

restrictions. CC&Rs must be filed with the 

state and are legally binding and permanent. 

They also state maintenance and insurance 

obligations and rule enforcement. 

Why are these 

important? 

Understanding the community’s 

governing documents allows board 

members and property managers 

to answer residents’ questions, 

make informed decisions and 

govern effectively. It also allows 

them to review policies and update 

them or create better policies 

based on community needs. 

» Bylaws: These measures establish the 

operational structure within the board 

and outline the board of directors’ power. 

They address board member duties, 

responsibilities, elections and voting, how 

many meetings boards have annually and 

board members’ term limits. They also 

list specifics about board and resident 

interactions, the cadence of meetings and the 

specifics about the community finances. Like 

CC&Rs, the community’s bylaws also require 

a vote by the membership to amend. 



Rules & Policies 

Effective boards that are in alignment have an easier 

time establishing and changing rules because they 

have a plan for the community and can guide their 

policy-making. When board members are familiar with 

the governing documents, they should be ready to 

review and adopt new rules and resolutions as needed 

or required to address challenges in the community. 

Rules and Resolutions should: 

» Maintain/enhance common and recreational areas 

» Improve residents’ safety and quality of life 

» Protect property value and homeowners’ interests 

When establishing new rules, it is also essential 

to assess their long-term impact and value. What 

outcomes does your board expect? Are these goals 

achievable? Board members should make sure that 

new regulations solve problems, not exacerbate them. 

Boards create rules through amendments, and new 

rules mustn’t supersede the governing documents, 

municipal codes, ordinances or state laws. In most 

cases, the board can create rules and regulations 

without approval from the residents, but they should 

consider the residents’ input via meetings. When 

adopting new policies, the community’s concerns 

can give board members feedback about what issues 

matter the most to the community. 

Generally, boards implement rules that center around 

safety and maintenance and address community 

issues impacting residents’ quality of life. The 

more common rules regulate parking guidelines, 

pet restrictions, trash and recycling. They also set 

decoration and maintenance standards, and home 

occupancy and rental restrictions. Some rules can 

also pertain to new safety protocols for amenities and 

common areas based on health mandates or natural 

disasters. 

For example, a community might have a rule limiting 

the number of parking spaces available to each 

unit, which effectively addresses excessive parked 

cars in areas that block access for other community 

members. Or a community with limited green spaces 

might have a rule about pet size/weight limits to avoid 

overuse and pet waste in common areas. These rules 

protect residents’ quality of life and property value 

and help to keep areas clean and safe. 



Rules may be added to, amended or repealed at any 

time by the board. Rules are usually recorded at a 

board meeting in the form of a motion called a policy 

resolution. A board can pass four different types of 

resolutions: 

» Policy Resolutions – These resolutions affect owners’ 

rights and obligations, usually about common areas, 

recreational areas, enforcement and architectural 

guidelines. We recommend that boards get community input 

before voting on new policy resolutions to get resident buy-in, 

which helps with compliance down the line. 

» Administrative Resolutions – These resolutions encompass 

the board’s operations, meeting locations, finances and other 

administrative functions. 

» Special Resolutions – These resolutions address specific 

policies, particular violations, authorizations of lawsuits and 

exemptions. 

» General Resolutions – Resolutions that address board 

decisions regarding routine procedures like annual budget 

adoption and contract approvals. 

While it is essential to know how to adopt new rules when 

needed, it’s also prudent for the board to revisit old rules and 

regulations and make sure that they still serve their intended 

purpose and are relevant. Because communities are constantly 

growing and evolving, it is part of a board’s responsibility to 

make sure that the community’s rules evolve. 

In some cases, state laws will change the community’s need for 

specific rules, or an emergency will spur the need to implement 

new regulations for residents’ safety. It is best to revisit your 

rules and regulations annually to review that they are 

not outdated. 

Why is this 

important? 

Understanding how and when to draft new 

policies and update established policies is 

essential to operating as an effective board. Not 

only does it allow members to ensure that the 

rules are not outdated, but it helps them keep 

residents safe, increase property value and 

improve quality of life. 



Meetings 

An association must hold meetings with homeowners 

or their elected representatives to conduct the 

community’s business. Most bylaws require a certain 

number of sessions to be held annually and open to 

all members. These meetings are vital as they provide 

members the opportunity to communicate their 

concerns and participate in the community’s decisionmaking 

process. They are also important as they allow 

the board to adopt policies that help protect and 

enhance the property. 

Meetings are conducted by a set of procedural rules 

outlined in the governing documents and by state law. 

These procedural rules dictate who can call meetings, 

who can attend meetings and the rules of order during 

meetings. The procedural rules also state who may 

speak and when, who controls the agenda and how to 

call a vote. 

To have effective meetings, board members should 

review materials beforehand and come prepared, 

follow a schedule and conduct meetings within an 

established timeframe — usually no more than 

90 minutes — to be successful. Effective boards 

will usually rely on an “action list” provided by their 

property manager that lays out the most important 

community items to discuss. 

There are several types of community meetings, as 

each addresses a particular need. 

» Board Meeting – A meeting of the board of directors 

that is open to all residents. Board meetings provide 

residents with the opportunity to address issues 

and participate in the process. Board meetings 

usually follow a set agenda and new business is 

not allowed unless an open forum is specified in 

the governing documents. During board meetings, 

the board reviews issues impacting the community 

like maintenance or resident disputes, and board 

members set policies and vote on business 

discussed in executive sessions. The board also 

reviews operations and sets the framework for 

future projects. Minutes of these meetings are kept 

and made available to residents. 

– If a board is in alignment and operating effectively, 

their meetings run efficiently, focusing on 

enhancing the community and property values. 

Suppose a community’s meetings are not running 

successfully because there is miscommunication, 

in-fighting and the sessions are running long. In 

that case, it may be a sign that the board is: 



Why are meetings 

important? 

Meetings are essential to keeping the 

board and the residents in alignment to 

get their buy-in and effectively govern. 

In communities where residents attend 

meetings and are a part of the policy-making 

process, boards report more compliance and 

fewer rule violations within the community. 

– On different sides of the same issue. 

– Unaware or lacking proper insight of relevant 

governing documents. 

– Not carefully considering long-term vs. short-term 

effects on the community. 

– Needs more practice in using rules to run a 

meeting. An experienced property management 

company can help boards align and be more 

effective in all of these areas. 

» Annual Meeting: One of the more important 

meetings a board can have, the annual meeting 

is open to all residents and is when the board 

discusses major topics in the community. New 

board members are elected during the annual 

meeting, the budget is presented and the board 

announces upcoming capital projects. 

– Recently, some boards have shifted to conducting 

annual meetings virtually, allowing board 

members and residents to socially distance and 

conduct the important business of the community. 

Partnering with a property management company 

like FirstService Residential lends your board the 

resources to shift your annual meeting to a virtual 

setting. 

» Special/Town Hall Meeting: Occasionally, a board 

will hold a special session or a town hall to focus 

on a particular item of concern, an emergency 

or any other situation that requires immediate 

action. Special meetings are more informal and 

allow residents to communicate concerns and give 

suggestions and feedback before the board adopts 

a new rule. Because they are more resident-friendly, 

special meetings and town halls provide the board 

the opportunity to present large projects or 

sensitive or controversial measures to 

all members and get immediate 

feedback, building consensus 

as a community. 



Finances & Reserves 

Board members need to thoroughly 

understand and manage the 

community’s finances and reserves. 

As a fiduciary of the community, 

a board member is responsible 

for protecting assets, budgeting 

responsibly and observing all laws 

that regulate the community’s 

finances. Board members should 

review financial statements, reserve 

funds, studies and any audits to 

assess the community’s financial 

health and set realistic goals for the 

future. 

A collaborative board engages in 

tactile, strategic planning and holds 

alignment meetings to develop a 

unified community vision. They 

understand the overall scope of the 

community’s finances in order to 

make investments and decisions 

that yield long-term results. 

Successful boards create their 

community vision and have a plan on 

how to achieve that goal. 

Another aspect of long-term 

financial planning is to make 

sure that the community is 

adequately insured and ready 

for any situations that may arise. 

Board members should review the 

community’s insurance coverage 

annually to protect its assets and 

the association. With more and 

more communities experiencing 

damage from inclement weather or 

rushing water, making sure that the 

community is adequately insured 

has become a top priority. 

Boards should also prioritize 

preventive maintenance within 

the community, as large repairs 

and construction directly 

impact a community’s finances 

and financial responsibilities. 

Preventive maintenance can 

make the difference between a 

minor repair and a large, costly 

one. Neighborhoods with strong 

management stay ahead of 

maintenance issues. It allows the 

community to keep the property in 

good working order, putting less 

stress on the community’s budget. 

While becoming familiar with the 

community’s finance is sometimes 

a significant undertaking, a board 

that partners with an experienced 

property management company 

has access to extensive accounting 

and financial resources to help 

protect the community and maximize 

investments. 

Partnering With the Right 

Property Management 

Partnering with an experienced 

property management company 

like FirstService Residential can 

give board members and residents 

guidance navigating governance, 

setting policies and finances. 

It also takes the demands of 

communicating directly with 

residents to answer questions, 

process applications and more, 

off the board. FirstService 

Residential has the resources and 

the experience to help your board 

transition into a well-aligned team. 

For more information, visit www. 

fsresidential.com. 

Why it’s 

important: 

Assessing the community’s 

finances today allows 

board members to plan for 

tomorrow. Understanding 

the resources available in 

the community’s reserves 

enables them to plan large 

projects or implement new 

maintenance projects. 


maintenance projects. 

About FirstService Residential 

FirstService Residential is North America’s property management 

leader, partnering with 8,500 communities across the U.S. and Canada. 

HOAs, community associations, condos and strata corporations rely on 

our extensive experience, resources and local expertise to maximize 

their property values and enhance their residents’ lifestyles. Dedicated 

to making a difference, every day, we go above and beyond to deliver 

exceptional service. 

FirstService Residential is a subsidiary of FirstService Corporation, a North 

American leader in the property services sector. Find out how we can help 

your community thrive. Visit www.fsresidential.com. 

FirstService Residential has the resources and 

the experience to help your board transition 

into a well-aligned team. For more information, 

contact FirstService Residential today. 

Making a Difference. 

Every Day.

Essential Steps to Becoming a High-Performing Board

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