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Club Governance Emboldened: Key Principles of Successful Boards

Beyond the duties of care, loyalty and obedience, there is a, I suggest, a fourth board duty: the duty of imagination.

Alice Korngold, 2006

Board support for innovation is vital to the performance of the board itself and to the performance of the executive and the whole organization. The Board sets the tone of expectations for innovative thinking and creative approaches to challenges it and the organization face. Practicing innovative thinking and supporting the executive in doing so are also vital influences on organizational innovation.

Kristina Jaskyte, 2012

At the recent World Conference on Club Management, I had the privilege of serving as a panelist during a National Club Association (NCA) session with David Chag, CCM, NCA Foundation board member and Michael Bruni, NCA board member. The session was entitled “Improving Club Governance with Exceptional Board Practices.” The session was full, which shows that club mangers are looking for ways to reach out to their boards in ways that will make the club operate more efficiently and encourage the development of a more well-rounded organization.

We all know that after the recession, member owned clubs struggled. While many of the larger clubs have bounced back, many of the mid-tier clubs are still struggling. In an informal survey at the beginning of the session, we asked the attendees what they thought of the operation of their boards. More than a third of them thought that their boards were partially or totally dysfunctional. Those clubs are the ones struggling.

Many board members are very successful in their private lives. Since they are successful and they are members of the club, there is a feeling they should be able to run the club. It’s the same fallacy that hits education … because you attended school, you know how to run a school.

There are several key principles that apply to all successful boards. The board must

  • Represent club members;
  • Develop, promote, and adhere to governance standards;
  • Be strategic;
  • Embrace collaboration;
  • Adhere to legal duties and ethical standards;
  • Practice regular self evaluation;
  • Establish sound succession procedures; and
  • Be imaginative, innovative and creative.

No place in this list, nor in the quotes above, does it state that the board must be involved in the day-to-day running of the club and become involved in discussing food costs and tee times.

While the board in every club is different, there are many common qualities among strategic boards. The focus is on governing and not managing. It shapes the club’s priorities through a strategic planning process. It makes decisions based on facts and not opinions and it has a responsibility to review the major trends in the industry and how these trends may impact the club. Feedback from members is essential in determining the direction of the club. Encourage a vibrant and intense recruiting and orientation process for new committee and board members.

Practical items also can impact how strategic a board can operate. The first should be obvious, but is not the norm in many clubs. No drinking before or during the board meeting. Have a social after to allow the board members to get to know each other better. The board should clear the agenda of operational issues. This agenda and all supporting documents needed for a decision should be provided in sufficient time to review before the meeting. If the first time the board sees the agenda is when they walk into the meeting, an intelligent and meaningful discussion is impossible. If insufficient information is available to make a decision or if an item has not appeared on the agenda, it should not be discussed. Finally, board members must realized that while they can argue behind closed doors, once a decision is made, it is a board decision and individual members should not undercut it. Going along with this is the fact that board members should respect and maintain the confidentiality of nonpublic discussions.

One of the issues that came up in the session involved suggestions on resources where club managers could find information to help guide their boards. Specifically, are tools available and how do they obtain them? There is no better place to go than the National Club Association. After all, governance is one of the three pillars on which the NCA stands. If your board is in need of guidance, contact them for assistance. NCA is there to ensure the success of its members.

Kevin F. Reilly, JD, CPA, CGMA, is a partner at PBMares, LLP, in Fairfax, Va. He is NCA’s treasurer and chairs the Finance/Audit Committee and serves on the Government Relations Committee. He is a director of the NCA Foundation. He can be reached at 703-385-8809 x 5505 or [email protected].