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I would invite comment on whether it should be a requirement, at the start of any Executive Committee meeting, for members to be asked to declare any competing interests touching on agenda items, and do the same if any substantial new issue is raised e g under ‘General Business’. Declarations, or the absence thereof, should be minuted.
A competing interest exists when an Executive Committee member’s judgment concerning a primary interest (for our purposes the proper stewardship of a Strata Plan’s common property, its finances and its general amenity) may be influenced by a secondary interest (such as financial gain or personal rivalry). I regard the term as preferable to ‘conflict of interest’ as it has a wider scope — a ‘conflict’ of interest implies a black or white choice whereas ‘competing’ conveys a range of choices with varying biases between what is best for the Strata Plan vs best for the individual.
A competing interest should not necessarily disqualify an EC member from speaking to a particular issue or even voting on it (in the way that a frank conflict would — or should), but the other members should have an opportunity of considering the individual’s position, and owners generally should be allowed to know the background of a vote on a possibly contentious issue and consider whether it was based purely on each EC member’s perception of the merits of the arguments for and against.
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Hi excathedra,
Your idea is an excellent one but its implementation could be difficult.
Declaring “conflicts of interest” is now standard practice in large organization (as you are probably aware). I have been involved in tender evaluation committee meetings for Government contracts that have a probity auditor who asks that question and minute the responses at the commencement of each meeting.
The concept of conflicting or competing interests is however a difficult one the grasp for many people especially if they do not have experience with it. Most people can understand the obvious examples, but there are many situations that most people would not see as conflicting or competing. Businesses send staff to training on the subject to give them the required level of understanding.
Therefore, for your proposal to work, I think you will need to somehow educate the Committee through a training session of some kind. I’m sure there are courses for this however I sure there will be resistance and trivialization of the idea.
I think I like the idea of ‘competing’ rather than’ conflicting’ as it has softer implication.
Definitely give it a go and good luck with it. Keep us posted on your progress.
Regards,
Rob T
Since you ask, Excathedra, my comment is ‘Competing’ sounds dodgy. ‘Conflicting’ doesn’t. ‘Nuff said?
Especially when in the same paragraph as ‘common property, finances, general amenity, secondary interest, financial gain, personal rivalry’.
There is some merit to the idea, but the reality is that it’s a moot point: at worst case, I would have assumed that each individual member of the EC has only his or her own interests at heart and that the value of their property is the over-riding driver for any decisions made.
Even at best, an EC member, still having regard for the value of their own investment, simply understands that a well run strata scheme helps the value of that investment grow: this type usually makes fairer decisions.
Furthermore, each EC member is a volunteer – they needn’t declare a thing…a good Executive Committee (emphasis on the plural) will balance individual needs with those of the scheme when making decisions for the OC.Let me state again that 99% of most ECs are made up of volunteers. Of that, the greater number of strata schemes have a Strata Manager who oversees most work orders and often steers the EC towards certain contractors (I would be more worried about this if I were you). The fact that an internet forum is replete with poor examples is par for the course: I doubt flat-chat would be as popular if its mandate were to only post ‘glowing’ examples of strata living….
The examples you have provided in your last post cannot ordinarily be decided upon by a single ‘EC’ member; they usually either need a percentage of the EC to approve (in the case of work being done to a certain dollar value), or need to go to the OC at an EGM/AGM in the case of scrapping existing contracts or awarding lucrative ones.
If you believe your EC is made up of both corrupt and/or individuals, then as a member of the OC (an authority higher than the EC), there are many ways to address the issue and this forum has given many different pointers on how to do that; they vary from simply attending every EC meeting, being on the EC, challenging the EC to prove how contracts were awarded, having a ruling applied by the tribunal to dismiss the EC and appoint a manager, etc, etc, etc.
Getting things done in Strata is often hard enough with a law that compels an EC member to declare each and every potential conflict.
Hi excathedra
The term used in the legislation is “disclosure” and there is an occasion where the legislation does require a disclosure. That is before an election of the executive, where possible executive members must disclose if they have any personal, business or financial connection with the original owner/developer or caretaker. This is required to be noted in the Minutes, but regardless, such disclosure stlll does not prevent the individual from being elected to the Committee, nor does it place any other restrictions on that member.
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