The 2022 Member Survey Says …
The National Club Association (NCA), in collaboration with GGA Partners, recently completed a survey of club leaders and board members covering the topics of governance, strategy and communications. A total of 274 clubs participated, of which 82% were from the U.S. and Canada. What did we learn? Quite a bit.
Governance
As we work with club boards to help them with their governance models, we start by comparing their model to the Club Governance Model[1], which is the standard of excellence in the club community. The result of this comparison is invariably a list of suggestions for bringing the club’s model more in line with the industry standard. We are pleased to see the survey results align nicely with our experience working with clubs around the world.
Board Size
The survey revealed that more than 75% of boards have between nine and 12 members, with almost one-third having exactly nine. We don’t have a magic number for board size, but we believe nine is about right. The question involves a tradeoff between the efficiency of decision making and the distribution of board duties. A board is more efficient with fewer directors, but it has fewer members to handle its duties.
Board Terms
The survey results show the preponderance of board member terms (77.7%) is three years and more than half of boards (57%) allow for an additional term. Although the survey data don’t indicate it, our experience is that clubs with four-year terms usually don’t permit a second term. The issue with the length of terms and the availability of additional terms centers on the balance between allowing more members to serve on the board and the benefits of a more experienced board member. Generally, the quality of board membership improves with length of service. With that assumption, although allowing a board member to serve an additional term reduces the opportunities for club members to serve on the board, we believe it is a price worth paying for a higher functioning board.
Accordingly, we like the message of the survey showing a three-year term with the option of standing for election for an additional term. However, our support for this policy is conditioned on the requirement that board members completing their first term must stand for election for the second term, i.e., not be automatically included on the next slate of nominees. Their election must be based on the qualities they exhibited during their first term.
Election Processes
Arguably the most important process in the governance model of a private club is the election method for board members. Getting the right people on the board is a fundamental principle of good governance. Additionally, getting the right board members is far more likely using an uncontested election than a contested election. An uncontested election occurs when the nominating committee presents a slate of candidates equal in number to the number of vacancies to be filled. In a contested election, the Nominating Committee presents a number of nominees for the board greater than the number of vacancies.
The survey results indicate that eight out of 10 (84.4%) clubs have slates of prospective board members selected by nominating committees, but they also show close to an even split between the use of contested elections (48.5%) and uncontested elections (51.5%). While we would like to see a more pronounced tilt toward uncontested election processes, the survey data points in the right direction. Clubs are becoming increasingly aware of the pros and cons of each approach. Contested elections may be considered more democratic and may honor the voice of the membership in choosing their leaders, but they also can rely on a political process that can be divisive, discourage service from qualified members, and result in board members being elected on an agenda, popularity, seniority, or something other than on their qualifications to govern fairly and effectively.
Uncontested elections are viewed with skepticism by those who see them as undemocratic and downright un-American. It seeks a ratification rather than an election from the members. To be sure, our support for the uncontested election process relies on the members’ trust in the Nominating Committee’s independence, objectivity and use of a board-approved profile in vetting candidates. The profile lists traits candidates must possess, including different perspectives, skills and experience desired to give the board access to a wide range of expertise. In summary, a respected, trusted Nominating Committee employing a rigorous vetting process based upon a well-reasoned board profile and using an uncontested election process is the best way for a board to get the right people on board.
Board Profile
Speaking of the importance of a board profile in vetting board candidates, we were pleased to see the top five most important candidate characteristics cited were:
- Experience on a committee
- Known as a team player
- Professional experience
- Diversity of perspective
- Prone to civil discourse
Each of these traits is worthy of being used in the vetting process. We particularly like the personality traits of a team player prone to civil discourse. Good boards have a culture of community and mutual respect among the board members. They are more likely to reach decisions based a reasoned debate and a willingness to arrive at a consensus. Further, contentious boards are unattractive to potentially good board candidates–the same candidates who are open to serving on boards known for their collegiality.
As for the mention of diversity, the important qualifier here is “perspective.” Club members have various backgrounds, ages and interests, the voice of which is worth a place in the boardroom. To be clear, we are looking for perspectives, not representatives. A board member makes decisions for the club as a whole, not decisions that benefit their particular interest or age group. After all, one of the legal duties of a board member is the duty of loyalty, i.e., the board member’s loyalty being first to the club and then to his/her area of individual interest.
Committees
One of the most cited criticisms of boards is their committees’ dysfunctionality. The survey reported that 59% of club have between six and 10 committees, with a survey average of 8.46 per club. Our experience suggests that more than 10 committees can result in far-flung, potentially uncoordinated groups of members. Fewer, well-managed and clearly focused committees make a good starting point with additional committees formed only when the need is obvious.
Other Governance Indicators
In the addition to the issues discussed above, the survey results value other characteristics of club governance such as the frequency of board retreats, board and board president orientation, and various practices such as board evaluation, implementing the COO governance model and developing a board policies manual. They serve as additional reference points for clubs to consider as they look for ways to serve their members with good governance.
Strategic Plans Guide Board Decisions
The survey also queried the use of strategic planning, revealing that more than seven of 10 (71.3%) of private clubs have developed strategic plans to guide their decision-making process. The average plan cycle covers just more than five years, and more than half of all boards review their plans annually. Not surprising, the most important element of private club strategic plans is member satisfaction.
Effective Communications
When asked about the effectiveness of club communications, 77% of survey respondents rated their efforts as well done, with 6% of clubs ranking their communications as excellent. Private clubs are using a variety of methods to gauge member sentiment about brand and value, including member surveys, focus groups, polls and attitudinal surveys and most believe their communications are effective.
NCA Members Desire Continuing Education
When asked how NCA and GGA can best serve private club boards and management, the response was clear—updates on trends, best practices and continuing education encompassing all aspects of club management as the resources club want.
Henry DeLozier and Fredric Laughlin are partners 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). They can be reached at [email protected] and [email protected].
[1] A full description and discussion of the Club Governance Model is contained in GGA Partners’ booklet “A Guide to Implementing the Club Governance Model.”