“If you must broker a vote,
will you be able to vote against your friend
if it is for the betterment of the community?”
– question at 7/12/2017 CountryPlace Board Candidates Meet and Greet
Positively, yes. Throughout my career, I have done so numerous times without exception. And I have made decisions in favor of critics. Real leadership is impartial.
When Board directors vote for or against a motion in equal numbers, our President has the opportunity to “broker” the vote. If he votes for the motion, he creates a majority and the motion passes. If he votes against or if he abstains, the motion fails to achieve a majority and the motion is rejected. In the same manner, if a vote is 5 to 4 for a motion (with one director abstaining or absent), our President could vote against the motion to create a tie, so the motion would not have a majority and would be rejected. The President can similarly broker a vote requiring a two-thirds majority, such as for the removal of an officer. There again, the President can broker the vote either to create a two-thirds majority or to eliminate a two-thirds majority, thus deciding the outcome.
Through more than 40 years of unique leadership roles in the pension industry, I have gained many close personal friends in government, among colleagues and co-partners in professional circles, and among clients and pension participants. I have also encountered critics, even some who have subjected me to public insult. In every instance in which I provided input to the decision, and in every case for which I was the person responsible for making the final decision, I maintained strict impartiality, never once improperly favoring a friend, never once unjustly ruling against a critic.
Many times, I have made a decision that involved the disposition of over a hundred million dollars. I have been the arbitrator of business disputes between companies where one side was represented by friendly colleagues while the other side had historically been antagonistic; always I was fair. I have been an expert witness in cases in which the opposing side pitted me against a close friend; always I was fair. I have been the architect of pension funding reform legislation when I had to carve out a compromise between legislators with whom I had close relationships and those who had openly questioned my professionalism; always I was fair.
In fact, I have frequently made decisions that went against my own self interests and the interest of the company I served as a partner. Under the Employee Retirement Income Security Act (ERISA), the basic federal law governing pension plans, a pension actuary must perform duties solely in the interests of pension plan participants and beneficiaries. Yet the actuary is hired by the pension plan trustees or the company that sponsors the pension plan. Numerous times throughout my career, I made a decision that was in the interests of pension plan participants – for instance, requiring an increase of millions of dollars in funding for a pension plan – even when that decision met strong disapproval from the company. In some of those cases, my company lost its client; in most of those, the profit center for which I was the partner directly suffered loss. The “friend” I brokered the vote against was my own family and my own self. But it was the right decision to make, because the interests of the pension plan participants was what mattered.
Like the ERISA standard that has been the basic guiding principle of my career, every director of a homeowners association has a fiduciary requirement to make decisions solely on the basis of the interests of homeowners, without self-interest or partiality. Moreover, real leadership extends far beyond merely doing only what is “required”: the homeowners’ interest is the only basis on which the President’s decisions must be based because that is the right thing to do.
And real leadership requires impartiality not only for brokering a vote, but in all things. Real leadership does not censor criticism while allowing the comment of friends. Real leadership is responsive to all, whether to friend or critic. And real leadership opens community events and facilities to all, without preference to friendship.
It would be so nice if the President could know every homeowner as a close friend. But that would not make decisions any easier, because there will always be votes that must be brokered: having friends on both sides of the issue doesn’t change the principle on which the President must make his decision. As I have done throughout a career that has made the same demands of my behavior and my decisions, any vote I broker will be done so impartially, whether for or against, whether involving a friend or a critic.
Real leadership is impartial. Real leadership serves only the interests of homeowners.