By John G. Fornaro
Often private club boards are viewed as a necessary evil – can’t live with ‘em, can’t live without ‘em. But the fact is boards can be healthy and functional.
Board members however, must know what’s expected of them, as should committee members, and perhaps the best way is to let them know with a detailed job description. Just like any other position in the workplace, directors need to know what’s expected of them.
Governance is a prickly subject. Private clubs that started out as the domain of a few are now appealing to a much broader market and people who definitely want a say in the direction of their club.
Yes, there’s a legion of reasons, not the least being the fact that a strong cohesive board can give a private club the thrust, the drive…the impetus and the vision to achieve its – the members’ – goals.
So how do you ensure that your club has a strong cohesive board to address the many critical issues facing clubs today and leading your club to a successful future?
Education is, of course, a major thrust…the direct education of board directors. The focus has to be on what is often termed “stewardship” where the objective is strong focused decision-making providing sustained leadership and stewardship for the club today and into the future.
Early preparation unquestionably can prevent difficulties further down the road.
It’s patently clear with club boards, as it is in many aspects of our lives today where we depend upon other people for what we do, that a board of directors is only as effective as its weakest members. If board members aren’t doing the job they committed to and for, it unquestionably has a tremendous impact not only on the board, but also the entire private club.
This can be especially true if a board member is the weakest link by their own choosing…i.e. a lack of commitment, little or no pre-board education or orientation, little or no pre-meeting preparation, being a disruptor or a failed team player. And make no mistake, these board members exist…you may have one in your own midst!
How many evenings or board meetings have been frittered way with little being accomplished while someone harps on their personal agenda, or because an ineffective board member simply hasn’t prepared properly for the meeting and items on the agenda? How often have you gone home with that empty feeling that little, if anything has been accomplished?
Is your board on board? This is where it all begins. Board members need to know what’s expected of them. Role clarification is essential emphasizes Tarun Kapoor, CEO of Kapoor and Kapoor, a hospitality consulting firm based in San Marino, CA. It’s a triple layer of clarification and accountability.
“The general manager, the executive committee and the board each must know what they’re responsible for, have the authority to do what is necessary, and know what they will be accountable for.” The lack of role clarification is where there is often confusion within the private club structure.
“Roles must be articulated and then enforced,” Kapoor said. ”Problems invariably come up when volunteers feel they have the right to execute decisions affecting the club’s resources, yet they don’t have the authority to make the decision.”
What does Kapoor suggest?
“The board and/or volunteers should be the ones setting the strategic direction, establishing club operating guidelines then ensuring management and/or volunteers are operating within the guidelines, and supervising, auditing and managing the GM or COO.”
The stewardship…the education and process of becoming an effective board member begins long before becoming a board member, and it’s a process that needs to be well developed and defined to ensure the club’s best candidates with the “proper” motives and skill sets are encouraged to run for directors’ positions.
Board members are part time volunteers, who while they may mean well, often have little understanding about the operation of a club, and the parameters of their role, their responsibilities, behavior and limits of their power.
Often there’s a lack of clarity of roles for both the board and its individual members. The board may see itself, and act unconsciously, as the club’s management, something not in the club’s best interests in these days of highly skilled paid managers.
There’s power in knowledge and information, but in the private club industry it’s also in the clubs best interests if the boards of directors also have the knowledge and information. It helps make the relationship between paid managers and the volunteer boards grow and prosper. Over the years this relationship for BoardRoom with managers and the boards has changed substantially. Where at one time paid managers might have been reluctant to pass along information they gleaned from BoardRoom, general managers now often provide a copy of BoardRoom for every board member.
The information and knowledge helps these clubs operate more effectively, especially in knowing how other clubs have faced and dealt with various issues.
“Educating board members about their roles in the governance of the club is what’s needed,” says Kurt Kuebler, partner in the private club executive recruiting firm of Kopplin & Kuebler, LLC.
“Certainly, as part of that educational process, there should be a thoughtful outline of standards that they should conduct themselves by, as well as how they go about the business of the club.
“Normally it’s a clearly defined framework of roles, responsibilities, goals and objectives, highlighting where their responsibilities begin and end; what they can and should not do in their roles – explaining how they are in a ‘fishbowl’ and that what they say and do, can often be viewed as speaking for the board whether it be in deeds, words or actions,” he explained.
Kuebler, who visits dozens of clubs throughout a year, says, “most times with high performing club boards, we’ve seen very thoughtful orientations and educational sessions, even before someone is considered for board service. It sets the expectations and lets you know what you’re getting into and whether or not you want to be part of it.”
In other words, decision time for potential board members. So why is it so important to work with potential board members?
“One of the most difficult issues in participating on a board is the expectation of having to contribute to the operational aspect of the club,” commented Phil Harvey, founder and president, Venture Insurance Programs.
“Boards today are expected to have a basic understanding of what makes the club function effectively, thus contributing their expertise and experience. Training and educating is important to ensure that new board members understand a club’s operational issues.”
“In addition to the six operational areas of legal, financial, greens, house, membership and long-range planning, fundamentals that should be incorporated into board training (education) are transparency, ethical behavior and the ability to assume duties and positions of leadership with the utmost confidence to support their responsibilities.
“In addition, board members should understand the responsibilities of the committee they serve on and how to carry out their duties to fulfillment,” Harvey expressed.
Gordon Welch, president of Welch & Welch LLC, a leadership training firm, suggests getting an early start on this whole educational process.
“It should begin as a part of the new member orientation, and training should ramp up as a member becomes part of a committee,’ he explained.
‘Committee members should be selected for strengths and interests. As they progress through committee level the board should be developing future board members purposefully.
“Board members should have training either before or just after the election, and all board members must be required to attend. I recommend meetings including all department heads, CPA and financial professional, IT professional, strategy leader (consultant), insurance provider and attorney to the board – someone with ethics and rules of order (parliamentary) knowledge.
“Every department is as important. I find some board members learning more from the director of engineering or maintenance than they may the CPA. Each department should give a three-year history and a three-year forecast, including their area of the strategic plan and how it affects them,” Welch added.
“It is also very important to have IT in at the meeting to discuss security issues for the club/member information.”
A board orientation, at least as a minimum, each and every year is vital. With a board orientation, the club’s general manager and staff can impart vital information and knowledge about the club’s daily operations, strengths, weaknesses, challenges and opportunities.
It helps in the process of developing effective board members who in turn can help the board make diligent, insightful policy decisions affecting all members.
“Many clubs start this education in advance of someone even being considered for board service,” outlined Kuebler. “More often, it is as soon as someone is elected and it should be reinforced every year…kind of a ‘CPR for one’s board and governance soul.’
“The educational process should provide a broad overview of the club, the roles of each key constituency, the strategic plan, the financials and should include a full tour of all facilities as well as an opportunity to meet all the key staff members,” Kuebler added.
“The leadership needs to assess the new board members’ passion and knowledge. Clubs today must be run as a business, not as your grandfather’s ‘playground’ type of club,” Welch emphasized.
“If there is no training (educating) the club leadership has no direction, no basis for decisions. Board members need historical information, direction and the governance side of knowledge.”
It also means the fundamentals of running a business must be front and center.
“Just because it’s a club doesn’t mean that we should throw those fundamental successful business practices out the window and run things on emotion, without facts or metrics or think that board service means advocacy only for the group or members or areas/activities of the club that we use, “ Kuebler advocated.
“A board member is there to consider the greater good; that is clearly what a thoughtful, beneficial education should start with!”
Publisher’s final thoughts
So to reiterate, “a board member is there to consider the greater good.” That is where a thoughtful, beneficial education should start.
In reality, education and training is one of the biggest challenges private clubs face today.
Often without a clear understanding of their role, board members assume they should roll up their sleeves and do what they do best – get things done. But for eons, micromanaging has been the scourge of private club management…with board members continually sticking their fingers into management’s pie. Undoubtedly, a lack of a proper board members’ educational process can lead to micromanaging…a situation that arises because board members don’t have a clear understanding of their roles…because a club’s board has failed to develop polices or procedures and properly delineating appropriate roles for staff versus the board.
However, through collaborative governance, boards establish policies and procedures and clearly define which decisions belong to the board and which belong to the management. Board members are aware of who does what, when, how and why. Of course, both the board and the club’s management are on the same team…not opponents.
Boardroom magazine has created Boardroom Institute (BRI) to help prepare the board to govern properly, and to help deal with micromanaging and other intrusions from board members into the club’s daily operation.
BoardRoom’s board member education, training and orientation focuses on collaborative governance and is available through our online interactive education process conducted by leading industry experts.
I have seen many full day board member orientations, overnight board retreats and short one or two-hour orientations, and in this case, I believe less is more.
BoardRoom Institute gives your board members (both new and returning) and committee members the basics. Boardroom Institute educates and trains them about the private club industry, their fiduciary responsibilities, and their roles as chair and members of the clubs’ various committees including membership, green, finance, insurance, house committee and more.
Collaborative governance is the main message…whereby the board of directors has established the club’s policies and procedures, where board members understand their roles and responsibilities; and how to work with the club’s GM/COO, who as the club’s paid manager, runs the club on a daily basis.
From an informational point of view, BRI also keeps track of who has seen and worked with the education modules relevant to them. BoardRoom Institute online is easy to use. Each module runs less than five minutes, something board members can do on their own time.
To view Boardroom Institute, visit BoardRoomMagazine.com. Click on Boardroom Institute. Watch the introduction and click to learn more. Call me if you have any questions (949) 376-8889. It’s the process leading to stronger, more relevant governance for your club.
At least that’s the way I see it!
John G. Fornaro, publisher
If you have comments on this article or suggestions for other topics, please contact John Fornaro at (949) 376-8889 or via email: firstname.lastname@example.org