This is the fifth article in a special six-part series commemorating the 50th anniversary of the National Club Association. This article from the June 1996 issue of Club Director addresses the complexities of the club environment, both from management and governance perspectives. Some of the questions asked in this article are relevant today: What new management and governance responses will be required to meet changing trends? Is your club positioned to address changing cultural and member-driven preferences?
During the past 25 to 30 years, the general trend of boards providing hands-on assistance with the operation of private clubs has significantly declined. For one thing, clubs have become multi-million-dollar businesses that require the expertise of not only a chief administrator, but professionally trained senior department managers. Over time, the board’s role has shifted from management by committee to that of critical advisor which sets policy, provides direction to the professional staff, and supports and promotes the club itself.
Yet, it may be overly simplistic to say that the board’s job is to establish policies and management’s is to implement them. Such a statement minimizes any dynamics in the relationship between the two bodies, especially at the point where decisions are made.
Inevitably, the relationship between volunteer and professional leaders will be driven by three factors inherent in any club’s internal culture:
- The actual degree of administrative involvement on the part of committees or the board.
- The balance of power between the professional staff and volunteers.
- The level of communication between the board and top manager.
W.R. Conrad and W.E. Glenn liken the relationship between boards and staff to a teeter totter in their book, The Effective Voluntary Board of Directors. When the board becomes overly involved with operations, the staff is held up in the air. When the staff fails to adequately inform the board and supply the data and background necessary for effective direction, it is the board that is held up in the air. Only when the two sides provide mutual steering and support is there balance between governance and operations.
The Dynamics of Change Management
The complexities of the club environment, from both management and governance perspectives, increasingly parallel those found in other nonprofits and for-profit businesses. Where once a long-range planning committee would meet annually or biannually to project the club’s needs five or 10 years into the future, today’s emphasis is on the study of trends and the management of change itself.
In this type of environment, active participation and leadership at the volunteer and professional levels are critical. Passive review or response can cause a club to miss opportunities or fail to adequately read the needs of members.
The issue of competition is just one example of the kind of rapid change clubs cannot afford to overlook. Few would deny that competition for members has increased in the last decade. However, today’s prudent planning committee is not only looking at sources of competition, but at ways in which that competition may have recently shifted or may shift in the future. Last year’s competition from a few area restaurants could, within a period of months, be replaced by competition from a new development-based private club, a new municipal facility, or semi-private club seeking to tap local demand for golf, tennis and other recreational interests.
It is usually the management team which supplies the necessary data, research or outside resources to help committees develop informed recommendations or responses to external challenges. And it is usually the management team that helps to communicate those committee recommendations to the full board before final decisions can be made.
Nowhere are the dynamics of change in club operations more clearly illustrated than in the structure and lifestyle of member-families. Planning for the needs and demands of multigenerational member segments has become as important a part of preserving a club’s future as recruiting a stream of younger members.
The related policy and management issues are myriad: divorce, widowhood, unmarried partners, dual-career marriages with and without children, the impact of children and active seniors. The challenges of maintaining facilities and programming for members from infancy through an advanced age requires a level of coordination between governance, committees and management that combines diplomacy, innovation and sound financial planning, both short- and long-term.
Indeed, the economics of the industry have seemed like shifting sand for many clubs. Those most hurt by the loss of deducibility have often simultaneously faced increased regulatory burdens and new state or local taxes. Now, in the wake of Warfield v. Peninsula Golf and Country Club, many clubs must also carefully review their level of outside business and make fundamental policy and operational decisions regarding mission, revenue and private status. [This decision by the California Supreme Court determined the club’s private status by focusing on regular and repeated nonmember transactions and the revenue it generated, rather than on its membership process.]
But perhaps the most significant trend to affect governance and operations is the concept of the town and country club. In the chase for competitiveness, some urban clubs, especially in difficult city locations, are now turning to this option as a way to expand amenities and facilities, tap the suburban market, and retain members. Whether by reciprocal arrangement or through outright purchase and expansion, the legal, tax, privacy and financial implications of these arrangements demand a close working relationship between volunteer and professional leaders of each club.
Ingredients of a Good Working Relationship
Managers repeatedly cite two ingredients of a smooth relationship between club boards and the professional staff. The first is continuity or consistency of the leadership teams, whether volunteer or paid. From a management perspective, it has long been recognized that high turnover among senior staff is disruptive and hinders the flow of operations between departments and top management.
At the volunteer level, leaders need to consider the amount of time it takes a new board member to adequately understand the club environment, and to become an effective and informed director. NCA’s Model Bylaws for Private Clubs offers the following advice about board terms:
When considering tenure limits, ensure enough experienced directors remain to avoid a loss of institutional knowledge and thus, a loss of checks and balances between the board and paid staff. [At the same time,] provision should be made … to ensure some turnover, particularly for board members who are not productive…. Staggered rotation ensures continuity of management and policy.
Lack of stability can have hidden effects, as well. Another key factor in maintaining a good working relationship is the degree of confidence and trust between the professional management staff and volunteer teams, qualities that cannot exist in an atmosphere of operational uncertainty.
Only when both groups understand the overall operation of the club—including the internal cultural influences that separate it from a for-profit or other commercial business—and agree on an operating philosophy, can volunteers feel secure delegating authority to staff, and management function effectively. As noted in CMAA’s position paper on the chief operating officer/general manager concept, the manager becomes “the board’s bridge to the staff and committees, [enabling the] board to avoid the intricacies of short-term focus that is the staff’s responsibility. This allows the board to work more exclusively on the holistic and long-term focus of club governance.” [Editor’s note: The Management to Leadership model that CMAA now subscribes is based upon the theory that general managers/COOs are responsible for three major areas: operations, assets/investments and club culture.]
There is an additional ingredient to the relationship between boards and the club’s top manager—i.e., the degree to which that manager is consulted by the board or involved in the process of handling issues that affect operations. Given that an integral part of any manager’s job is to spot and track trends and critical issues in both the club’s internal and external environment, it is only natural for the board to also seek his or her recommendation regarding possible options.
In its commentary on board and staff relationships, The Private Club Leadership Guide emphatically states:
Club leadership should insist that the general manager attend and actively participate in all board and executive committee meetings…. The only exception to this [practice] should be when the board or executive committee meets in executive session.
In treating the general manager as a key partner, a colleague in club affairs, the board creates a working atmosphere that allows the club to benefit from the manager’s talents…. In addition, insisting on this working relationship with the board clearly demonstrates to members the respect that is accorded this person.
Using Committees Wisely
Properly organized, a club’s committees can support both governance and operations, generally serving a number of purposes:
- They reinforce the club’s mission, since they are usually created to assist with a particular project, program or issue that serves the members’ interests.
- They provide a cost-effective source of additional manpower and support, freeing the board and management to pursue their own specific duties.
- They inject enthusiasm and excitement in programs and services.
The important thing to remember is that club committees, as representatives of the membership who have specialized skills, are advisors to both the board and management. Through their work, the needs of members are translated into objective goals for programs and services.
There is a popular perception that volunteerism at the nonprofit level is declining. This is not necessarily true; what most volunteers want are well-defined responsibilities and a shorter commitment that does not conflict with the other aspects of their lives.
Club committees are no exception. While standing committees are usually specified and their functions outlined in the club’s bylaws, their profile or “job description” is not. A committee’s role, duties, and composition are best understood, and the right members matched with the right volunteer jobs, when the following items are specified in writing:
- The committee’s purpose.
- How it will be administrated, with whom it will coordinate, and to whom it reports.
- Guidelines regarding the frequency of meetings.
- The committee’s duties, responsibilities and overall objectives.
- The number of members, preferred experience and length of term.
Note that in writing a description, care should be taken to broadly define roles and responsibilities, not list minute tasks. They should provide focus and direction, not specify how duties will be performed or limit the agenda that will be followed.
Future Leadership—Meeting Tomorrow’s Challenges
How will current trends affect clubs’ missions? What new management and governance responses will be required? Is the club positioned to address changing cultural and member-driven preferences?
Successful clubs of the future will be those that can meet these kinds of changes with vision and forthright leadership. Developing the right balance between governance and operations is the bridge to that future.
Mary Barnes Embody was editor of Club Director magazine from 1991 to 2007.
Sidebar:
A Self-Test for Volunteer and Professional Club Leaders
(Answer Yes or No)
The board treats the general manager as a key colleague, integral to the overall leadership team, and seeks his/her input on all issues affecting the club.
The board includes the general manager in all board meetings and proceedings, except closed-door sessions that involve his or her performance evaluation.
The board has a formal procedure in place for evaluating the general manager at least annually, recognizing achievement and setting goals for correction of any deficiencies.
The board and general manager agree on and understand the club’s overall operating philosophy.
The general manager keeps the board informed of emerging issues and trends affecting club operations and updates the board periodically.
The general manager assists the board with its decision-making process by providing pertinent information about operational measures for facilities, programs and services.
The general manager seeks the board’s guidance in policy areas that are unclear or are the source of member conflict.
The board refers complaints about staff to the general manager and complaints about the general manager to the president or executive committee.
The general manager has full authority to hire, promote, discipline and terminate club staff based on established budget and performance guidelines.
Committees generally coordinate with the general manager, reporting to the board through him or her. In those instances where they report directly to the board, they at least keep the manager informed of their activities.