NaCCRA Forum: General

I am a resident of a not for profit CCRC. Some where I remember reading that 30% of the board of directors should be residents. Does anyone know where i might have read that or does anyone know what VACCRA''s recommendation is? I live in a CCRC of approximately 300 residents, our board totals 14 members, our only resident on the board is the president of our resident association, also our Resident Finance Committee chair is on the CCRC Finance Committee. Thank You

Lewie Gayton

I think you will find that most CCRCs do not have residents as voting members on the Corporate Board--only fairly recently have some truly progressive Boards allowed resident full-participation as board members (and even fewer states have required that some number of residents must be on the board). At El Castillo in Santa Fe, NM, the Corporate Board's Bylaws expressly state that no resident can be on the Board; two residents (the RA president and one other resident) can be present at Board meetings, but have no real voice (and cannot vote)--and, in fact, are 'excused' from the meeting at the whim of the Board.

My CCRC has had three resident corporate board members since it was founded in 1980. They are of limited effectiveness for a number of reasons. First, they serve short terms. With only four of five meetings a year, there isn't much opportunity to learn their roles. Second, many have little or nor experience serving on boards, and they receive no preparation or training. Third, they are obliged to sign non-disclosure agreements which makes them nervous about discussing matters with fellow residents. And fourth, they are both courted and dominated by the CEO. The selection process for candidates seems to favor people who are likely to go along to get along over people who seek to challenge the status quo.

In short, having residents on the corporate board does not automatically correct problems or improve communication.

Richmond,

What is the selection process for candidates? Is there an election in which the residents vote? Are the resident board members able to vote on board matters?

The corporate resident board members are appointed by the corporate board. However, the residents association chooses and recommends candidates which are almost always accepted. I would have to read the bylaws of both organizations to clarify the details. It's not ideal. Too much influence is possible by incumbent resident association board members. If the resident association leadership is chummy with the CEO, the process can be elitist with insiders excluding outsiders.

AGREE. Having residents on CCRC Boards serves Management — not residents.

NO, having engaged, well informed, competent residents on the board provides crucial perspective. The CCRC is funded by the residents, and in the best circumstances it exists to serve them. CCRC boards should have a strong bond with the community they serve. There are many practical reasons why this is so. Trust is primary.

For most prospective CCRC residents, the decision to commit to a particular community is a major life transition. It often requires committing a major piece of the family nest egg as an entry fee. The monthly fees consume the lion's share of monthly income. The move means leaving old friends and meeting new ones. These changes demand a very high level of trust.

At the same time, prospects rely most heavily upon their impressions of the community when they visit. If they meet people they can imagine spending the remainder of their lives with, and those people are trusting of the institution that runs the community, that's a big factor. Typically 60% of converted leads come from the present residents.

When the board of directors, the management, and the residents are aligned and working together collaboratively, the community thrives. When the board becomes siloed, the management becomes authoritarian, and the residents feel alienated, it is a sure sign of serious trouble ahead for the CCRC.

Show me evidence that having residents on the CCRC Board serves residents' interests.

At our CCRC our Resident Advisory Council won't even tell us what they accomplished on behalf of residents. All they've done is rubber stamp the CCRC Board's wish list. Our CCRC has been unable to fix real problems for years. They keep fixing what isn't broken.

Resident Board Members get "captured". There are many examples of U.S. state and federal regulatory agencies being captured by the industries they are supposed to regulate? That is they do more to benefit the industry rather than the industry's customers. See https://chatgpt.com/c/06309576-5208-4afb-b767-5e6e5afb4613

Resident Board members behave the same way.

As of October 1, MD Law requires that at least one CCRC resident is a member (independent living) of the Corporate Board of Directors. Here at The Residences at Vantage Point in Columbia via, MD, we currently have two residents members. They are the President and Past President of the Residents' Assoc. New law is attached. The initial Bill had several other requirements, but was opposed vigorously by organizations representing CCRC management. We continue to strive to get more Rights for IL residents here in MD.

That's a symptom, not the core issue. Some residents want to be taken care of by the institution and fancy a disengaged life of leisure as what they purchased when the joined their CCRC. Others, facing decreasing independence for medical and cognitive reasons, may be fearful of offending those they depend upon. Whatever the reason, when an attitude of resignation, and "go along to get along" prevails, those residents become passive. The core issue is the community culture. If it isn't united in a common mission to pool energies and resources for the good of all, then the interests of management and an elite group diverge from those of the greater community. Bad decisions, secrecy, unfounded rumors, lack of accountability, mission creep, and a host of other negative organizational consequences develop.

It's a matter of making the system function well. The corporate structure exists to support stewardship of the community. In the end, it's all about a healthy community. The residents must be actively engaged to achieve balance between their interests, the interests of management, and the mission or commercial ambitions of the board.

Yes, residents and management want a financially stable community. Beyond that management and residents have different interests. Residents on management Boards are subject to "capture".

Contrary to the Code of Virginia § 38.2-4910 our Resident Advisory Council (RAC) was setup by management. Management supplied the Constitution and Bylaws, Handbook, and Manual (total about 30 pages) — our management does the same with its 20 or so communities in about a dozen states.

RAC does not disclose what it has accomplished by being on management's Board, it does not record who voted for what, it does not place controversial issues on its meeting agenda, it does not reveal votes received by candidates for positions on the Board. In my opinion our RAC serves management's interest better than residents' interests — the term for this is "capture".

Here are examples of potential regulatory capture within state agencies in Virginia:

1. Virginia State Corporation Commission (SCC)

Example: The Virginia SCC is responsible for regulating utilities, insurance, and financial institutions, among other industries. It has been criticized for its oversight of the state’s utility companies, particularly Dominion Energy, the largest utility in Virginia. Critics argue that the SCC has historically been too lenient with Dominion, allowing the company to secure favorable rate structures and avoid stricter environmental regulations.

Impact: Dominion Energy has been able to pass on significant costs to consumers while maintaining high profits. The SCC's regulatory decisions have been seen as favoring the utility over the interests of Virginia residents, leading to higher electricity bills and delays in transitioning to renewable energy sources.

2. Virginia Department of Environmental Quality (DEQ)

Example: The Virginia DEQ, responsible for enforcing environmental regulations in the state, has faced criticism for its handling of the Mountain Valley Pipeline (MVP) and Atlantic Coast Pipeline (ACP) projects. Environmental groups and local communities argued that the DEQ did not adequately assess the environmental impact of these projects, particularly regarding water quality and the potential for soil erosion and landslides.

Impact: The DEQ's approval of permits for these pipelines led to significant legal challenges and protests. The perceived alignment of the DEQ with the interests of the pipeline companies rather than environmental protection raised concerns about the agency's independence and commitment to its regulatory mission.

3. Virginia Department of Health (VDH)

Example: The VDH has been criticized for its role in regulating long-term care facilities, particularly nursing homes. During the COVID-19 pandemic, the VDH's oversight of these facilities came under scrutiny as nursing homes experienced severe outbreaks, and some were accused of failing to protect residents adequately. Critics argued that the VDH had not enforced regulations strictly enough and that its close relationship with the industry may have contributed to lax oversight.

Impact: The outbreaks in nursing homes led to high mortality rates among elderly residents, prompting calls for reform in how the VDH regulates and oversees these facilities. The situation highlighted potential issues with regulatory capture and the need for stronger protections for vulnerable populations.

4. Virginia Alcoholic Beverage Control Authority (ABC)

Example: The Virginia ABC, which regulates the sale and distribution of alcoholic beverages, has been criticized for its dual role as both a regulator and a participant in the market (since it also operates state-owned liquor stores). Some argue that this creates a conflict of interest that can lead to decisions favoring the agency's financial interests over fair competition or consumer protection. For example, the agency has been accused of setting prices and controlling distribution in ways that benefit its own operations.

Impact: This dual role has led to concerns about whether the ABC can impartially regulate the alcohol market in Virginia. The potential for regulatory capture in this context could limit competition and consumer choice.

5. Virginia Department of Transportation (VDOT)

Example: VDOT has occasionally been accused of prioritizing the interests of large construction firms and developers over those of local communities. In some cases, highway projects have moved forward despite significant opposition from residents and concerns about environmental impacts. Critics argue that VDOT's relationships with contractors and developers may influence its decision-making process.

Impact: The construction of controversial transportation projects can lead to environmental degradation, displacement of communities, and long-term changes to local landscapes, all of which may disproportionately benefit industry players over the general public.

These examples suggest that, like in other states, Virginia's regulatory agencies have sometimes been perceived as being too closely aligned with the industries they regulate, potentially at the expense of broader public interests.