Board of Directors Survival Guide
A Practical Resource for New HOA & AOAO Board Members
 
Congratulations on serving your community. Here are the things every board member should understand to help your association operate successfully.
 
Serving on an association board is an important responsibility. Most board members are volunteers who generously give their time to help protect and improve their community.

While board members are not expected to be experts in accounting, governance, or compliance, understanding the basic responsibilities of the board helps create a stronger, more financially responsible association.

This guide provides an overview of common responsibilities and important considerations for new board members.

Understanding Your Role as a Board Member

The Board's Responsibility
The board of directors is responsible for governing the association and acting in the best interests of the community.
Board members have a responsibility to:

• Act in good faith and in the best interests of the association
• Follow governing documents and applicable laws
• Make informed decisions based on accurate information
• Maintain proper records
• Oversee the association's financial responsibilities
• Ensure the association is meeting its reporting and compliance obligations

Board members are decision-makers and stewards of association resources. Professional advisors, accountants, attorneys, and other vendors provide expertise and support, but the board remains responsible for governing the association.

Understanding Board Positions

President
The president generally serves as the leader of the board and helps guide meetings and board discussions.
Responsibilities may include:

• Presiding over Board meetings
• Helping establish meeting agendas
• Ensuring board decisions are carried out
• Coordinating with vendors and advisors as needed
• Supporting effective board communication

The president does not make decisions independently unless authorized by the governing documents or the board.

Vice President
The vice president typically assists the president and assumes responsibilities when the president is unavailable.
Responsibilities may include:

• Supporting board operations
• Assisting with projects or committees
• Helping ensure continuity of leadership

Treasurer
The treasurer plays an important role in overseeing the association's financial activities.
Responsibilities may include:

• Reviewing financial reports
• Monitoring income and expenses
• Understanding the association's financial position
• Assisting with budget preparation
• Reviewing bank reconciliations and financial records
• Helping ensure financial obligations are addressed

A treasurer does not need to be an accountant; however, the treasurer should understand the association's financial reports and ask questions of the accountant when clarification is needed.

Secretary
The secretary is responsible for maintaining important association records.
Responsibilities may include:

• Recording meeting minutes
• Maintaining corporate records
• Maintaining official notices and correspondence
• Ensuring required records are organized and accessible

Meeting minutes should accurately reflect board actions and decisions.

"First 90 Days as a New Board Member" checklist.
 
Things that would be extremely useful:

• Obtain governing documents (Bylaws, etc.)
• Review prior year's financial statements
• Review budget
• Review reserve study
• Confirm tax filing status
• Confirm registrations
• Review contracts
• Verify insurance coverage
• Understand assessment process
• Meet with accounting support

 
Financial Responsibilities Often Overlooked

Annual Tax Filing Requirements
Associations often have tax filing responsibilities even when they are nonprofit organizations.
Responsibilities may include:

• Filing required federal tax returns
• Filing required state tax returns
• Providing information needed for tax preparation
• Maintaining appropriate financial records

Being a nonprofit association does not automatically eliminate tax filing requirements.

Financial Statements
Regular financial reporting allows the board to understand the association's financial position.
Financial reports commonly include:

• Balance sheet
• Income and expense statement
• Budget comparison
• Bank reconciliation information
• Assessment receivable information

Financial statements are not simply accounting records—they are tools that help the board make informed decisions.

Reserve Studies
Reserve planning is an important part of responsible association management.  A new reserve study is required every 3 years under Hawaii law.

A reserve study helps the association understand:

• What major components will require replacement
• Estimated future costs
• Whether current reserve funding is adequate
• Long-term financial needs

Boards should review reserve information regularly and incorporate it into financial planning.

Association Registrations and Compliance
Associations may have registration and reporting requirements depending on their location and governing requirements.
Boards should understand their responsibilities regarding:

• Association registrations (AOUO, Articles of Incorporation, etc.)
• State filings
• Tax registrations
• Required disclosures
• Record retention requirements

Meetings and Governance

Annual Meetings
Annual meetings provide an opportunity for owners to:

• Receive association updates
• Review important matters
• Elect directors when required
• Participate in association governance

Proper notice, documentation, and recordkeeping are important parts of the annual meeting process.

Board Meetings
Effective board meetings should:

• Follow established procedures
• Focus on association business
• Allow appropriate discussion
• Document decisions clearly

Good meeting practices help boards make informed decisions and maintain transparency.

Meeting Minutes
Minutes should document:

• Date and location of the meeting
• Directors present
• Significant discussions
• Motions made
• Decisions approved

Minutes are the official record of board actions and should be prepared carefully and maintained permanently.

Important Association Records to Maintain
Associations should maintain organized records, including:

• Governing documents
• Declaration and bylaws
• Rules and regulations
• Board meeting minutes
• Annual meeting minutes
• Financial statements
• Tax returns
• Contracts
• Insurance policies
• Vendor agreements
• Owner records
• Reserve study reports
• Registration documents

Good recordkeeping protects the association and helps future boards understand past decisions.

Handling Difficult Owners
Most owners want their community to succeed, but disagreements and difficult situations can occur.
Helpful practices include:

• Responding professionally
• Following established procedures consistently
• Avoiding personal conflicts
• Documenting important communications
• Applying rules fairly and consistently
• Seeking professional advice when needed

The board's responsibility is to serve the association as a whole while treating all owners fairly and respectfully.

Building a Successful Association
Strong associations are built through:

• Responsible financial management
• Good communication
• Accurate records
• Consistent governance
• Long-term planning
• Professional guidance when needed

Board members do not have to know everything. They do need to ask questions, seek appropriate guidance, and make decisions based on reliable information.
 
The Board Governs. Professional Advisors Support.
How We Can Help
 
Our Fiscal Management & Board Support Services are designed to assist self-managed associations with accounting, reporting, administrative support, and financial management. 
 
We help boards maintain organized records, understand their financial position, and fulfill their responsibilities with confidence.

Go to the AOAO Board Resource Center