During our current, heated political season, also at the time many private clubs do their budgeting for next year, I thought it might be interesting to compare the politics of clubs with the politics we hear about on the news every night.
Particularly with the various forms of member-owned clubs, governance can take on different forms. Most are governed by boards of directors, typically with committees for various departments within the club, such as golf, greens, house, social, tennis, etc. Some clubs, however are governed by a “benevolent dictator” which is basically one individual who has the authority to make all decisions with respect to the operations of the club.
In Washington, there are generally two groups (Republicans and Democrats) that debate policy. Democrats are known for spending and taxing while Republicans argue for fiscal responsibility and stricter budget controls. At clubs it’s not much different. While there are no names for the groups, there are also often two groups that dispute the path forward. One group, typically older members aim to preserve tradition, implement more rules and refrain from spending and reinvesting in the club. Conversely, many younger members seek modernized facilities, fewer rules and less emphasis on tradition in favor of progress. Often, the division isn’t based on age, but rather economics. Many clubs risk losing those members at the bottom of the club’s economic ladder which can be lethal to a club’s future if the cost of membership increases to a point of putting membership out of reach for some.
Like Washington there is often considerable debate on every issue and limited willingness to compromise. I’ve seen this fact alone precipitate the demise of several clubs. Unlike our government, many clubs change leadership far too often. At some clubs, the president and board change annually, which causes a lack of consistency. Conversely, there are clubs that seem to be run by “the same old crowd” and this occurs as much because some seek the associated power as because nobody else wants the responsibility. In either case, club leaders are typically volunteers, usually have full-time careers and despite being successful and intelligent, don’t run clubs for a living. The committee/board model is rarely efficient and it’s not uncommon for the professionals to be told how to do their jobs by the amateurs.
Long-range planning is often overlooked by boards seeking simply to get through the year so they can hand off the baton to the next board. One issue of great concern is transparency. Just like Washington. Often, boards act in secrecy rarely communicating with members, soliciting their input or considering their desires. Boards typically have nearly absolute autonomy and those individuals that control the board control the club.
Club politics can be ugly (just like governmental politics) and at many clubs those selected as club leaders sometimes micro-manage, and interfere with the professional staff, sometimes expecting and demanding preferential treatment at the club. The sometimes laborious and time-consuming decision-making process of board run clubs can and often does prevent adequate and timely response to daily issues. Many boards are too large (some with 20 or more members) and it is not uncommon for board meetings to last long into the night with little getting done as each director contributes his/her “2 cents”. Much like government, board run clubs are anything but a model of efficiency. Club Corp founder Robert Dedman, said that clubs are “run like nobody’s business, because they are nobody’s business.” Conversely, it should be noted that most member-owned clubs are “not-for-profit”, and decisions are made based on member satisfaction (not a bad thing) or (more troubling) based on the personal desires of some club leaders. There are a considerable number of clubs with this operating model that find themselves distressed to the point that there are several firms seeking acquisitions in this segment to be converted to for-profit facilities. When boards turn over too frequently, there is inconsistency but some maintaining leadership roles almost in perpetuity, can result in those individuals accumulating excessive influence and creating animosity.
Some member-owned clubs are governed by a “benevolent dictator”. While this sounds unappealing, it’s sometimes a hallmark characteristic of very successful clubs.
Most clubs have either a constitution and/or bylaws which dictate things like governance, number of board members, officer positions, membership process and other procedures, and then a published set of rules that members are expected to comply with to enjoy the privileges of membership. Unfortunately, many of these bylaws were enacted 50 or more years ago and would benefit from updating. Since these are private clubs, some (not very many) still discriminate in selecting their membership, which is still generally legal in most cases.
The success or failure of private clubs can often hinge on the culture of the club. The most successful clubs (whether member or investor owned) have established a culture of ownership among the membership, who are often willing to pay to improve the club. The political environment at any club often dictates whether members assume the role of owners or customers. If the board fosters a culture of inclusiveness, members are more likely to assume ownership and contribute. If not, they are inclined to act like “customers” and object to fee increases, re-investment and many of the actions of the board. Often, this can be resolved by transparency and communication, and by action on the desires of the membership.
Yes, clubs are much like Washington. There are two “parties”, lots of debate, considerable inefficiencies and micro-management. Change is rarely a popular thing in club boardrooms. Those that handle these issues successfully stand a far greater chance of survival than those that don’t.