Lay the groundwork for better club governance through properly focused board education. One of the most unusual aspects of private club governance is the constant turnover of officers and directors. In most clubs, a new president takes over every year or two. Frequent turnover in the boardroom can cause instability that ultimately takes a toll on the long-term health of the club. Without a consistent framework for governance, clubs tend to lose sight of long term plans and drift away from their original mission over time. Laying the groundwork for a permanent standard of governance that will withstand time and leadership transitions isn’t easy, but it is possible and the benefits to your club will be immense.
The first step toward establishing a durable governance model is to evaluate the orientation materials board members receive at the beginning of their terms with this in mind: While each of these talented individuals brings with them a deep knowledge of their own business or industry, it is imperative for them to understand from their very first board meeting that the model of their business, no matter how successful, is not the same as the club’s business model.
Establishing a common understanding of key facts and priorities in terms of the club’s financial and operational success should be an integral part of the orientation process. Imagine what might be accomplished in future meetings if every board member started his or her term with a solid grasp of those key components. Here are a few examples of what the board should know that would dramatically improve focus and alignment in the boardroom: the club’s total operating revenue, the gross margin, the compounded annual growth rate and the dues ratio (revenue from member dues as a percentage of total operating revenue).
Laying the groundwork for an effective and enduring governance model is a solid investment in the future of your club, and it begins with a commitment to focused, fact-based board education.
Ray Cronin co-founded Club Benchmarking in 2009 with his business partner Russ Conde, and has presented the concept of strategic benchmarking and the “Financial Insight Model” to club boards and committees across the country. He is currently serving his third term as president of Thorny Lea Golf Club in Brockton, Mass. He can be reached at [email protected]