Editor’s note: This article is based on the program, “The Board-CEO Partnership,” presented at the National Club Conference in April.
In today’s environment, effective oversight and direction are as important for private clubs as they are for businesses in the corporate world. Often, there are multifaceted concerns in a club setting that require thoughtful interaction between the volunteer boards and professional management. In these situations, there must be a system of collaboration, as this relationship can make a key difference in determining the club’s future success. While the board chooses the manager, it is the manager who often guides the board’s work and helps set priorities when vital decisions need to be made.
Board-manager relations were central to the discussion of a panel at the 2014 National Club Conference in San Francisco. Panel members represented the club board, the general manager and the club consultant. Discussion centered on topics about the roles of the GM and board members, developing collaborative relationships, key attributes of club leaders, balancing responsibilities and best governance practices.
Both panel discussion and audience participation during the session indicated that these topics were critical in defining a successful club. The information provided in this article comes from the ideas discussed by the panel that also serve as best practices.
GM & Board Roles
By definition, the general manager is the club’s chief staff executive, responsible for the club’s success in all aspects, including goals, activities and member satisfaction. These outcomes are achieved by devoting full time attention to operations, planning and staff performance and coordination. Given the wide variety of types and sizes of private clubs, the general manager’s role and specific duties should be clearly spelled out by the board of directors.
Traditionally, boards of directors define goals and set priorities, and managers along with staff “make it happen” by skillful organization and allocation of resources. However, as club operations become increasingly complex and the role of volunteers more specific, this distinction has blurred; many clubs rely on at least some level of input from the general manager during policy development.
For effective club governance, the club should have bylaws that clearly delineate the roles of the board and the club members in providing leadership. The process begins with board nominations, which provide a mechanism for the best members to be selected to serve. Board nominees should have an in-depth understanding of the club, its mission and a desire to serve the club in a professional, fair and ethical manner. Board members often have the responsibility to help build and maintain the club’s culture, so it is critical that new board members and officers be presented with clear job descriptions, a shared club vision and a thorough orientation program. New officers should understand their roles in helping to see that the club’s strategic plan is implemented and in supporting the general manager in carrying out the club’s business plan.
Effective clubs take particular care in electing good officers. Allan Jamieson, past president of the California Golf Club of San Francisco, notes that good board members provide support to a good general manager (CEO) and give that general manager the authority to provide continuity for the club. The general manager should be empowered by the board to direct club operations, serving as the point person to get every new member incorporated into the club culture and integrated with other members. To make this partnership work, the club must clearly define lines of communication between leadership and the general manager.
Henry DeLozier, a principal at Global Golf Advisors, uses an hourglass visualization to illustrate the role of the board, the general manager and the club staff. The general manager is at the center point of the hourglass where he/she must manage both up and down. There should be a strategy or plan for working with the staff team to implement policies and operational tactics. At the same time, the GM needs communication skills to provide the board with management reports that highlight club operations and member satisfaction. Mutual respect and open communication between directors and the general manager are essential to a positive work atmosphere. Differences should be dealt with in a constructive, forthright manner; in other words, being able to disagree without being disagreeable.
Collaborative Relationships
Successful club operations depend in large part on the quality and nature of the board of directors and general manager’s relationship. The interaction between board and staff is a two-way street in which the board chooses and directs the manager and the manager in turn guides the board, keeping it focused on important tasks while relieving it of the minutia of daily club operations.
Necessity plays a significant role in board-manager relations as well. In the limited time available for board meetings, many specific and vital decisions must be made, giving boards time to accomplish only what is necessary. All noncritical functions and decisions then fall to the general manager by default. Therefore, a general manager should understand the needs and operations of multiple departments, as well as food and beverage management, budgetary and payroll procedures, sports facility management and personnel management.
Because the club is a business that delivers a very high level of diverse and complex services in an environment that satisfies many different stakeholders, the GM’s operating and managerial style should then be compatible with club members, staff and culture. In addition, a general manager’s personality should positively affect club morale and efficiency and foster good relations with and among stakeholders.
Dan Denehy, president of DENEHY Club Thinking Partners, reinforces the need for the GM to establish a high level of confidence in operating the club business. This must all be done as members enjoy club services in a “home-like” environment, never worrying about the business aspect of club operations.
The business aspect of club operation is critical to effective governance. Performance objectives must be balanced with the operation’s financial strength while always remembering that member satisfaction is central to the club’s mission. Board members are not always knowledgeable about sound “club” business practices, so managers must have a thorough financial understanding of methods and functions and be able to succinctly communicate this financial information to the board. There should also be strong internal controls that help build the board’s confidence and reinforce the overall goal that managers manage and the board governs.
Key Attributes of Club Leaders
At successful clubs, the board selects the most qualified general manager and then clearly defines that person’s role. Boards want general managers who can contribute in the boardroom, offering ideas as a knowledgeable and competent executive. The general manager must be financially accountable and have the ability to lead as well as manage. The GM should always be the expert on club operations possessing the most up-to-date understanding of the club industry as a whole and issues affecting their individual club. General managers should stay ahead of the game in providing their boards with well-researched and developed plans for the club.
Kirk Reese, general manager/COO of the Los Angeles Country Club, illustrates the critical nature of communication skills in conveying trust and credibility to the board. A GM should always provide thoughtful consideration to board ideas, but remain custodial of the club—finding commonality, providing data-driven information, and being honest with leadership in order to make balanced decisions.
The board should also support the general manager with regularly scheduled constructive evaluations and feedback, which might include instruments such as 360-degree evaluations. Boards should provide support for their managers with a strong commitment to professional development and maybe even a CEO coach. Likewise, managers must have the board’s support and the financial resources available to provide on-going training and professional development for club staff.
Balancing Responsibilities
It is vital for board members to understand the general manager’s role as the professional selected to provide leadership and operational expertise for the club. The board should supply the GM with sound policies and then provide complete support in implementing these policies. The board should not become involved in operational or personnel decisions. It is the general manager’s responsibility to provide an effective and efficient communications system that keeps board members informed on club issues and what is needed to support the strategic initiatives of the club. The general manager should communicate the club’s successes as well as the challenges, and present the board’s goals to the staff and the staff’s expertise to the board.
A careful balance of responsibilities between the board and the manager usually includes well- functioning committees. Committees serve to support the board in providing a liaison function between members, the board and the general manager. They listen and communicate. Committees must also function in a supportive role recognizing the board’s strategy in fulfilling the mission and maintaining and promoting the culture of the club.
Governance Best Practices
For successful club governance, boards and general managers must find common ground, overcome challenges and balance the roles and responsibilities of the club leadership. Effective club governance:
- Results from sound bylaws that clearly define the role of the board and that of the general manager.
- Provides an effective process for board member selection and orientation that results in board members who seek to provide cooperative leadership and support and not seek their own personal agendas.
- Provides for a committee structure that supports the various functions of the club in a liaison role.
- Provides for the position of a general manager who not only has the authority to lead the club but also possesses the professional skills to do so.
Joe Perdue is faculty member and director of Global Hospitality Initiatives, Georgia State University.