Six Key Traits of an Effective Board Treasure

Every board of an association holds the crucial duty of safeguarding and maintaining the community's assets. This essential task demands careful financial oversight, spearheaded by the board treasurer.

While the whole board shares the fiduciary responsibility to manage community finances, the treasurer plays a key role in analyzing financial data and explaining it to fellow board members.

Without an effective board treasurer, the community's financial health could face unintended challenges due to mismanagement or misunderstandings of financial statements and budgets.

In one example, an association found itself in a budget deficit by early September. The treasurer hadn’t been checking monthly financial statements or informing the board, leading to a significant problem that took time to resolve.

Each board member may approach the treasurer's role uniquely. With no formal qualifications required beyond election, it can be unpredictable what kind of treasurer will be elected for the community.

There are treasurers who take the reins not only of financial issues but all board matters, and others who stay quiet. Sometimes, a treasurer steps up due to a lapse in leadership, or simply because of a strong personality. There are treasurers so competent that other board members defer to them. Striking a balance is essential—a treasurer should be confident and capable without sidelining other board members.

So, how can a community choose a treasurer with the right mix of qualities? Drawing from experience with numerous boards across North America, several common traits of an outstanding association treasurer can be identified:

Your treasurer is integrated within the community

A treasurer cannot be detached, surfacing only during budget time. They should review the delinquency report monthly and interpret financial statements for the board, staying connected to the community and understanding what's impacting the financials at any given time.

Your treasurer focuses on long-term financial sustainability

The treasurer's responsibilities include developing and reviewing the annual budget, managing reserve funds, investing association funds, and overseeing assessments. They must guarantee the security of assets, implement proper internal controls, and maintain records.

Excellent treasurers plan at least five years ahead, with some crafting ten-year plans to foresee future assessments. An example is a community that analyzed its current financial standing, set future goals, and mapped out the necessary steps for assessment increases, led by the treasurer.

The treasurer embraces continuous learning

Regardless of their familiarity with accounting, a good treasurer remains open to learning. Treasurers vary from retired CPAs well-versed in financial matters to those unfamiliar with checkbook balancing. Even experienced accountants may find nonprofit fund accounting challenging, but they can be supported with clear, jargon-free explanations.

The treasurer educates the board

Board and community members may not fully grasp the role of reserve funds or other financial matters. It’s up to the treasurer to guide the board and community on the correct use of these funds, collaborating with a professional property management team.

The treasurer collaborates with the property management company

A solid relationship with the staff accountant and the onsite or portfolio manager is crucial for the treasurer. This partnership ensures that everyone is aligned and understands the treasurer’s expectations and financial knowledge.

The treasurer is detail-oriented, yet balanced

A treasurer is vital for the financial health of the community, overseeing financial management details like record-keeping, insurance, investments, and collections. However, this should be balanced with the tools provided by the property management team, avoiding unnecessary micromanagement.

A distinction must be made between being meticulous and over-managing. While a treasurer should ensure vendors are paid, they shouldn’t over-monitor every aspect of the job. Trust in property management reduces unnecessary oversight.

Some treasurers might even keep a daily check on outstanding checks, leading to confusion if steps like stop payment requests are not synchronized, causing duplicate payments or bank errors. Effective treasurers balance attentiveness to financial details and leverage available tools to focus on crucial matters.

The role of a board treasurer is among the most important within a community. Successful treasurers stay connected, remain eager to learn and educate, and conduct transactions openly. Above all, commitment to community well-being and long-term financial stability is paramount.