Wednesday, March 26, 2008

Dual Governance Means Dueling Governments

Earlier this week I got a call from a friend living in an intentional cmty. He wanted advice about the dynamics of using back-up voting when consensus seemed stalled—which is a great question. It involves both issues of governance and decision making, which I'll discuss separately.

The cmty property is owned by a homeowners association (HOA) and individuals own the homes (like a condominium). As far as the state goes, the legal entity is the HOA. As far as the cmty goes, the power resides in all the members (while there can be considerable murkiness about who is a member and what that means, I'll save that for another time), and decisions are made in the plenary (meetings of the whole). The cmty has a commitment to making decisions by consensus. However, the HOA bylaws (papers filed with the state) stipulate that in the event that the group fails to reach a decision by consensus, it can resort to a super-majority vote (in this case 2/3). To date, the HOA Board has essentially been rubber stamping whatever is decided in plenary, yet they have the legal right to do something else.

The situation driving the inquiry is that the cmty has been laboring since last fall to pass a budget for 2008. Some people are getting increasing frustrated and are ready to vote and move on (after all, the second quarter starts next week!). The person asking my advice sits on the HOA Board and he's been approached by a cmty member to have the Board use
their legal power to break the logjam.

The question I want to chew on today is:
Under what conditions, if any, would it be wise for the HOA Board to take an action that the cmty considers within its authority and has not reached agreement on?

The essential challenge here is serving two masters. If the two agree, there's no problem (though you might question how respectful it is of people's valuable time if you're having two different entities deliberating the same issues). If they disagree, now you have a problem. Who do you follow? When push comes to shove, who's running the cmty?

Let's look deeper. Legally, only homeowners can be members of an HOA, and the general way the power is parsed is one home=one vote. This is different than a cmty plenary—where all voices have the right to be heard and fully considered—because some households have more than one adult living there and not all people living in the cmty are homeowners. (Never mind the enriching, yet complicating input of minors, long-term guests, or absentees landlords.)

If the HOA Board is going to be more than a rubber stamp for plenary decisions (or perhaps a cmtee operating underneath the plenary's aegis), then homeowners will have clout that others do not. If this is actually exercised more than rarely, it will undercut the power of the plenary, which will quickly learn to look over its shoulder to see what the owners think on tough issues, lest their decisions be "overturned on appeal." Some members (owners) will be more equal than others, and this will tend to make a sham out of plenary deliberations since all decisions there will ultimately be subject to review by the HOA Board, whose authority has the weight of law.

I call this the club in the closet, and I strongly urge groups not to go down this road, which leads inevitably to lots of resentment and bad power dynamics. Better is to go entirely in one direction or the other: either make it clear that all power resides in the plenary and keep the HOA Board out of it, or make it clear that the owners make the decisions (while, hopefully, being genuinely interested in the input of all living in the cmty).

Having said all that, there can still be a useful and active role for the HOA Board. Let's consider the case of the gridlocked 2008 budget. Board members can jawbone with the resistance. That is, they can approach all the people who have their knickers in a twist over the budget and find out first-hand what their concerns are. If people ask, "Why are you coming to me about this?" the Board member can fairly respond: "I am an HOA Board member and technically on the hook if things don't get resolved about the budget. We need one to legally operate, and I'm motivated to be active in the attempt to get this resolved. I figured it would be helpful to have a personal conversation with as many members who hold strong views about this as possible." (Note: this answer may be persuasive to a budget-beleaguered member where an approach by Chris Citizen may not be; hence the special potential for the HOA Board to play a helpful role.)

What I'm suggesting here is that HOA Board members could be active in trying to improve the flow of information and building bridges between isolated parties. That is, they could be active in support of the plenary (rather than pulling their legal rights out of the closet and imposing a solution on the cmty). Caveat: if this work is already being done by others (pehaps the Finance Cmtee or the Process Cmtee), then it may not make sense for the HOA Board to duplicate it.

I'm suggesting a series of private or small group conversations where you make sure you understand people's concerns about the budget and you make sure they know you know (so they won't feel so isolated or misunderstood in their views). It is important to reach out to everyone known to have a concern; not just some of them. Done well, this has several potential benefits:

1. Being accurately heard and cared about is deescalating all by itself. It helps create a more friendly and creative environment when the topic next surfaces in plenary.

2. The answers may give you insights into ways to break the logjam.

3. If the differences ultimately prove to be irreconcilable, you have properly set the table to invoke the back-up vote… which I'll discuss in my next blog.

No comments: