VaCCRA: VIRGINIA CONTINUING CARE RESIDENTS’ ASSOCIATION  

STATEMENT in SUPPORT of RESIDENT REPRESENTATION

on CCRC BOARDS of DIRECTORS

Background:  In the last decade, the governance of continuing care resident communities (CCRCs) has been dominated by debate over resident representation on their respective corporate boards of directors. Nationally, over three quarters of CCRCs are not-for-profit corporations. Hence, their business model dictates that revenues will be provided by the residents through entry, monthly and ancillary services fees. Thus, residents are stakeholders even though they have no equity interest in their “homes.” Clearly, CCRC residents have placed their own significant wealth in the hands of a governing corporate board of directors who depend on these funds to conduct day-to-day operations and long-range planning.  

Points at Issue: Meaningful dialogue for resident board membership has been clouded by these assertions:

• Confidentiality: Skeptics voice concerns that resident board members would reveal confidential matters.  In fact, all board members accept the responsibility to abide by rules of the board, including those involving confidential matters. Any member who breaches board rules is subject to dismissal, according to the by-laws of the board.
• Conflict with residents: Some worry aloud that residents serving on boards would be subject to criticism by fellow residents concerning unpopular decisions. When, in fact, many of this newer generation of residents have come from extensive and successful careers in government, business and philanthropy. These new residents have had significant experience in service or leadership positions on similar boards.
• Conflict of Interest: These arguments continue despite the fact that nearly twenty (20) years ago, Virginia Attorney General Mark L. Early ruled there is no conflict of interest in resident board membership. [September 25, 2000 Reference 00-072]

In Summary:   There is currently a nationwide movement among the more than 2,000 CCRCs toward appointing residents as voting members of CCRC governing boards. The original conception of the retirement community posited a set of passive residents and custodial providers. Over the years, significant changes in resident profiles with the accompanying lifetime experiences have led to changes in resident expectations. Residents now wish to be recognized as contracting parties in the direction of their long-term communities. That relationship and role in direction setting is best expressed by selecting resident members with full voting privileges for the corporate board of directors.

To that end, it is crucial that nominations to the board be open to all residents.  Nominees should be selected by their fellow residents. Any resident proposed should have already passed through several layers of acceptance by their peers and be representative of their community. As such, after Residents’ Council review, 3-5 nominees may then be forwarded to the Board’s Governance Committee. The Committee could review resident candidates by the same criteria as other candidates for the Board, making the resident voting member equal in the eyes of board members. When directors of not-for-profit corporations seek to populate governing boards, they would be well advised to seek candidates who possess the knowledge, experience and qualifications no other board members have – understanding of life within a CCRC and a deep knowledge of resident needs, desires and concerns.  

The Board of the Virginia Continuing Care Residents Association (VaCCRA) strongly supports residents serving as members of the governing boards of their CCRC with the same obligations and rights, including voting, as non-resident board members. Furthermore, we urge each CCRC in Virginia to move ahead with this statement and propose adding a resident member with voting privileges to their own CCRC’s Board of Directors.

 August 1, 2018