“Effective nonprofit boards deliberate as many and govern as one,” according to noted governance expert Fred Laughlin. Unfortunately, many club boardrooms have become a reflection of the evening news marked with bickering, contempt and dysfunction.
How can board leaders restore the levels of cooperation, deliberation and thoughtful leadership that most members expect?
The launch point for improving club governance and reducing board room conflict is a board policies manual (BPM). A well-conceived BPM has five parts which describe the sound principles and guidance for effective club governance.
A sound BPM sorts the principles of effective nonprofit governance. The third section of the BPM describes the role of a board of directors with particular focus on the board’s job description and the orientation process which helps make new board members effective and congruent in the board room.
Laughlin, a director at GGA Partners, suggests several intentional steps that help to elevate the board to its best performance:
- Board Selection Criteria – Clubs should use an uncontested board election process, which requires a trusted Nominating Committee to recommend a slate of candidates in the same number as the number of board positions open.
Eliminating factionalism, the embarrassment of “running for the board” only to lose, and the choice a popular member who is ill-prepared to serve as a member of the club board are three benefits of the uncontested election process.
The key to a trustworthy election process is the trust and respect earned by those members who serve on the Nominating Committee. The best Nominating Committees are populated by members who are highly respected and trusted for their good judgement and integrity. The greatest drawbacks for uncontested elections arise from Nominating Committee members who are indiscreet and known for their “agenda” within the club. Members’ respect of the individual members of the Nominating Committee reflects into the overall trust of the committee’s work.
- Board Code of Ethics – All board members should be provided with and accept—in writing—the ethical requirements of board service. Such requirements include and are not restricted to the following characteristics:
- Confidentiality and Non-Disclosure – All board members must be accountable for protecting the privacy of the board and its deliberations. This is particularly difficult in most private club board rooms where many board members adopt a casual approach to fiduciary responsibilities. Board members must be trusted by their fellow board members for the capability to be discreet and trustworthy.
- Conflict of Interest – Board members must be scrupulous to avoid conflicts of interest. Normally this provision assumes that one would refrain from self-dealing and/or benefitting financially from the clubs contracting and procurement activities. Board members are expected to refrain from being a champion for self-interests in which the individual board member is a beneficiary, such as favorable tee times for certain categories of membership.
- Business-like Governing Practices – Club members expect their board members to take a business-like approach to corporate governance. In fact, most reference points for governing practices tie directly to members’ experiences with boards of publicly traded companies where board conduct and process is held to a high standard.
Such board disciplines as board authority to speak for the board—and club—are expected as are financial reporting and disclosure standards.
Dealing with Board Room Conflict
In these contentious times, some board members cannot be dissuaded from causing conflict within the board room. Such cases require genuine leadership from the board president and fellow board members. “Going rogue” and disrespecting the duty of sound governance requires that fellow board members confront the rogue board member firmly and fairly. There is tremendous value in a board member who sees a different point of view and such differences deserve respect when the board member with a different opinion works constructively with fellow board members. There is no place for those who do not honor principles described here.
Laughlin emphasizes, “the board deliberates as many and governs as one.”
Henry DeLozier is a principal at GGA Partners, an international club management consulting firm that provides specialized services to more than 3,000 clients from offices in Toronto, Phoenix and Dublin (IR). He can be reached at [email protected].