Become a Member
Ed Welch, please contact Neil Quinn at email@example.com
The conflict-of-interest argument is ridiculous. I say this as a lawyer and also as someone who served as President on 2 HOA Boards. The law was clear: I didn't have a conflict-of-interest. In a CCRC, where we don't have an ownership interest as in an HOA, there is even less of a reason to think we have a conflict-of-interest. In fact the CCRC Boards chosen by the owners of the Non-Profit, have a bigger conflict-of-interest, if there is one.
Regarding the "conflict of interest" argument disingenuously being used by some CCRC managements to avoid transparency, or in opposition to the Illinois bill, please everyone read the March/April 2021 issue of NaCCRA's LifeLine newsletter, particularly the letter to the editor at the back of the issue.
The bill in Illinois has passed out of the House Committee and will go the the floor of the House for a vote.
I agree with Linda, Nancy, and John. The resident board member has to focus on the best interests of the community to maintain financial viability. It is right that the board selects and appoints the resident member.
My community uses the Residents' Council to vet people who are interested in serving. They interview up to 10 candidates and submit names of three residents to the ED. Their names are submitted to the Board Governance Committee who interviews the candidates and makes a recommendation to the full board.
Some folks complain that the resident directors do not tell us what is going on. But they are acting as full board members and do not speak about the discussions or actions of the board. It is hard to explain to other residents that although they are residents, they are not on the board to represent the interests of the residents. Their job is to carry out the duties of care as outlined in this article.
Providers have been objecting to residents on the board for years. They don't like change. I have heard an ED say that they control the board. No wonder they don't want a resident on the board. An effective board should welcome another perspective. Age should not be the issue. Many board members are retired themselves. The only difference is where they live. Resident director can contribute to an understanding of the culture in the community as well as bringing skills and experience to strengthen the board.
Maryland does require a resident on the governing body. Maryland Law
You are quite correct. Every Board member does have a fiduciary responsibility to the community. However, residents have a very particular knowledge of how effectively the community is being managed. Since they are the constituency who is financially supporting the community and the people who are living there their voice should be heard.
We have lived for many years in a cooperate apartment. That type of building is managed by a profession management group that is engaged by the directors who are all resident/owners elected by their fellow residents. This type of organization works very well. In that case, as in CCRCs, the residents have committed substantial financial resources to the community and are very concerned that it is well managed.
Yes, LInda, I think that's a critical point. And in our case, the resident Board member is selected by the Board and its Nomnating Committee. In my opinion, that person really should not be elected by the residents.
John, all board members serve the best interests of the CCRC. Even a resident board member. They do NOT represent residents.
Resident of a CCRC
I think that it must be acknowledged that residents are the primary stakeholders in the community and thus deserve to have a vote in how the community is managed.
To avoid the apparent conflict of interest, it is important that the resident representative abide by a code of ethic and are appointed based on election every year or two.
If they effectively represent their fellow residents, it can make the Board a more effective unit and make the community a happier healthier place.
With regard to the objections to Illinois Bill HB4180, what specifically is the conflict of interest cited by the administrator of Westminster Place?
The conflicts I can see for a nonprofit CCRC are (a) the interest of an individual resident vs. that of the entire community, including future residents and (b) the interest of present residents vs. that of future residents.
As I hear more about Leading Age, they seem to be more directed towards CCRC's management staff, rather than the residents of the CCRCs. Am I correct that Leading Age gets most of their revenue from vendors and CCRC management?
Thanks Linda. This is a very thoughtful article. But it does not deal directly with the issue of insurance for resident board members. I believe there are at least some CCRC that have residents on their boards. I assume they are covered by the same insurance as other board members. It would be helpful if we could have confirmation of specific examples of this.
I've written the author in the hopes she might clarify some points. I wrote:
There is now legislation in several states that could require or suggest that these non-profit CCRC companies have some residents as members of the board of governance. A few CCRCs have that now. A bill by the state of Illinois has registered opposition by the state’s chapter of the industry’s leading organization. AARP is registered as a proponent. An Illinois CCRC company opposes it for two reasons: 1. It is a conflict of interest for a resident to be a member of a board that governs over it, and 2. Non-elected board members would not be insured.
To add to this,
Great article below, "Liability and the Board: What Governing Teams Need to Know".
First, think of all the volunteering that residents do for the CCRC. They are everywhere as free labor. Are they covered by insurance? This opposition is a way to try to not give residents any power, keep them off the board. The AARP has the money and knowledge to fight this.
Liability and the Board: What Governing Teams Need to Know – Nonprofit Risk Management Center
Excerpt: Every state in the United States has a volunteer protection statute that limits in some respect the personal, legal liability of volunteers. Some state volunteer protection laws only protect directors and officers serving nonprofits, while others protect even narrower categories of volunteers, such as firefighters or other emergency service personnel. The federal Volunteer Protection Act of 1997 is similar in some respects to the state laws, but sometimes offers more robust protection. In states where the VPA offers greater protection than the state law, volunteers in that state enjoy the broader protection of the federal law. One legislative purpose of the VPA was to shift responsibility for harm caused by volunteers away from volunteers and over to the nonprofit organizations they serve.
LeadingAge Illinois represented by Jason Speaks has registered opposition to the bill HB4180 (Illinois House). It might be of interest that Ryan Gruenenfelder of AARP has registered as a proponent of the bill. The administration of our community, Westminster Place, Evanston, IL. has said he opposes it for two reasons: 1. It is a conflict of interest for a resident to be a member of a board that governs over it and 2. Non elected board members would not be insured. I am assuming that means that because the resident on the board would be chosen by the residents (and not the board), that resident would not be liable if the corporation were sued. Any help on this would be great.
Can you point me to an explanation of NaCCRC's position that I could share with other residents here in Illinois?
Yes, we support this
Do I recall correctly that NaCCRA supports legislation like this?
Residents need to know about a new policy if this becomes law. My guess is bad CCRCs will find a way around this.
Someone in Illinois told me: ". LeadingAge, the lobbying organization for Life Care management, has registered an appearance in opposition to the bill on behalf its members. No resident of a Life Care facility has entered an appearance in favor as yet." This is heard before committee this Wednesday.