To the editor:
There are quite a few housing co-ops in the The Riverdale Press community, and occasionally they make the news. An analysis (Thursday, July 14, 2016) covered, among other points, board governance and transparency.
Co-op members and board members may find interesting some guidance from Robert Szold, the attorney who created the legal foundation for Amalgamated Houses, Park Reservoir, and many other New York cooperatives. It is taken from “The Functions and Duties of Directors of a Housing Cooperative,” a statement delivered by Robert Szold in 1956.
“A housing cooperative is a unique combination of a business corporation and a residential community. It has many attributes which are not found in an ordinary business corporation. Nevertheless, it is important to emphasize that the functions of the directors of a housing cooperative are in large measure those of the directors of an ordinary business corporation….”
“The relation of the Board of Directors to the stockholders in a housing cooperative differs from the relation of the Board to the stockholders of an ordinary corporation. Stockholders of a housing cooperative are not only interested in profits and dividends as in an ordinary business corporation, but in a housing cooperative the stockholders also are, in effect, sole consumers of the corporation’s product.
More important, however, a housing cooperative is a cooperative. It is the duty of the Board to build up and maintain the cooperative spirit, the atmosphere and morale of a cooperative community.
The Board of Directors should furnish to the tenant stockholders not only periodic balance sheets and operating statements but information on all pertinent aspects of the operations as well – vastly more information than stockholders of an ordinary business corporation are entitled to receive. From time to time also the Board will no doubt consult the stockholders or groups of stockholders about various phases of operations which as a matter of precedent, custom, logic, efficiency and law are within the province of the Board alone to decide.”