GOVERNANCE
CHARACTERISTICS
OF GOOD CORPORATE GOVERNANCE
APPLICABLE TO A HOMEOWNERS’ ASSOCIATION
Discipline
Corporate discipline is a commitment by an HOA’s
senior management to adhere to behaviour that is
universally recognised and accepted to be correct and
proper. This encompasses a company’s awareness of,
and commitment to, the underlying principles of good
and external parties such as the auditors. The decisions
made, and internal processes established, should be
objective and not allow for undue influences.
“All processes, decision-making and mechanisms
used will be established so as to minimise or avoid
potential conflicts of interest.”
governance, particularly at senior management level.
“All involved parties will have a commitment to
adhere to procedures, processes, and authority
structures established by the organisation.”
Transparency
Transparency is the ease with which a member is able
Individuals or groups in a company who make decisions
and take actions on specific issues need to be
accountable for their decisions and actions. Mechanisms
must exist and be effective to allow for accountability.
These provide members with the means to query and
to make meaningful analysis of a company’s actions, its assess the actions of the board and its committees.
economic fundamentals and the non-financial aspects “Identifiable groups within the organisation – e.g.
pertinent to that business. This is a measure of how
good management is at making necessary information
available in a candid, accurate and timely manner – not
only the audit data but also general reports and press
releases. It reflects whether or not members obtain a
true picture of what is happening inside the company.
“All actions implemented and their decision support
will be available for inspection by authorised
organisation and provider parties.”
Independence
Independence is the extent to which mechanisms
governance boards who take actions or make
decisions – are authorised and accountable for
their actions.”
Responsibility
With regard to management, responsibility pertains
to behaviour that allows for corrective action and for
penalising mismanagement. Responsible management
would, when necessary, put in place what it would take
to set the company on the right path. While the board
is accountable to the company, it must act responsively
to and with responsibility towards all stakeholders of
have been put in place to minimise or avoid potential the company.
conflicts of interest that may exist, such as dominance “Each contracted party is required to act responsibly
by a strong board member or large property owner.
These mechanisms range from the composition of the
board to appointments to committees of the board,
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Accountability
to the organisation and its stakeholders.”