Every 4 years, Americans go to the polls to decide who will lead and govern for the next term. As we all observe, right now there is considerable division and discourse, which sometimes gets ugly, even to the point of political violence. Fortunately, at member-owned private clubs I don’t know of any violence but the discourse and debate can most certainly become contentious.
The question of who should run clubs is one rarely directly addressed as club politics dictate in many cases that those who simply seek leadership positions get them because few others want the bother. Based on my observations at many clubs through the years, including those where I’ve been a member, the line between governance/leadership and management becomes blurred. In other words, club leaders often micro-manage and club managers (the professionals) are overruled by leadership (the amateurs) or become “yes men” in the interest of self-preservation. This dynamic can infect all facets of club operations including (but not limited to) how low to cut the greens, what to include on the menu and how to establish and enforce (often arcane and unnecessary) club rules.
The roles are really quite simple. Managers (the professionals) should handle the everyday operation of the club and advise leadership on club policies. Club leadership (the amateurs) should establish policies, usually with the recommendations of management, taking advantage of the expertise they’re paying for. Unfortunately, it doesn’t always work out that way. Many clubs retain the services of consultants (like Golf Property Analysts) to provide objective advice on a variety of issues ranging from upgrades to facilities to market positioning, membership programs and pricing, design and long range planning. Like Mr. Dedman said, “clubs are run like nobody’s business because they are nobody’s business.” Accordingly, leadership doesn’t always listen to management or the consultants they hire. I know of one very prominent, high revenue club that simply terminated the consultant that told them what they didn’t want to hear and hired someone who did. Yes, the consultants have responsibility here, but even if the truth hurts, it’s better than moving forward on “alternative facts”. With so many clubs reinvesting significant dollars in their facilities, and incurring significant debt to do so, honest and independent advice from experts is valuable stuff.
As I’ve repeatedly said, the culture of any club is impacted by its leadership and that culture can be seriously compromised when leadership recklessly spends too much money, incurs too much debt and hangs around too long. Stable management for long periods is often preferable, although it is not uncommon for management to change too frequently when either new blood is installed as club leaders, that are sometimes more politically skilled or simply want management that is beholden to them.
First and foremost, club leaders should be selected based on the following criteria:
- Does their skill set match current club needs?
- Are they individuals of high integrity?
- Do they want the job (too much)?
Clubs are complex enterprises and having leadership that understands the challenges in the various departments is important. It shouldn’t be a popularity contest or based on loyalty to certain groups or individuals.
It is essential that club leaders be of high integrity. There are numerous examples of board members getting club contracts or kickbacks and even ignoring club bylaws to remain on the board for extended periods beyond what is allowed. Many clubs have considerable revenues and budgets and the more money involved, the greater the chances of corruption.
IMHO, the most important criteria for leadership roles at clubs is that anybody who wants the job should be immediately disqualified. The most effective club leaders are those who are asked, if not begged to lead because of their skill set and high level of integrity. I’ve always wondered why on earth anyone would want their club to become a job? Isn’t that where we go to relax, play golf or other sports and have fun with friends? While the volunteering of time and effort is admirable, many do it for the wrong reasons and often seek the power and control involved, just like many of our politicians in Washington. As a result, corruption becomes more likely. Term limits are essential and must be strictly obeyed. It is essential that club leaders develop a productive working relationship with management and staff but that boundaries are established and maintained.
While I agree wholeheartedly with Mr. Dedman that clubs should be run like businesses, there is a difference in that most member-owned private clubs are not-for-profit organizations where decisions aren’t necessarily made exclusively based on financial impact, but rather member satisfaction. The bottom line is that if the members are willing to pay for something, and a decision doesn’t impact the long term future of the club, it may be prudent, even if not profitable. The key is whether or not and how the decision impacts the club’s future. Debt doesn’t just go away with the next generation.
It’s just these kinds of decisions where club leadership, club management and independent advisors need to concur on the best path forward and this is best done by all parties “staying in their lane” as defined by their roles.
The National Club Association (NCA) and Club Managers Association (CMAA) have produced a club governance handbook which spells out many recommendations for these roles as developed by a large panel of club industry experts. Among those that stuck out to me was the suggestion of developing a board policies manual. While all club boards have policies, far too many rely on implicit, unwritten policies rather than explicit, well documented policies. Implicit policies tend to morph over time, are subject to varying interpretations and are often cited by the most senior or loudest person in the room. Explicit board policies are documented policies, available for everyone to see and understand. They describe how the board will use the authority granted by the bylaws to carry out its governance duties. Even if written, it should be clear that all policies are administered consistently and equitably.
The handbook also offers guidelines for terms of office on the club board, saying: “allowing more than six total years on the board not only reduces the opportunity for other club members to serve, it denies the board the fresh ideas that may arrive with new members. We, therefore, believe the most common approach, i.e., the three-year term with the provision for one additional term, provides a good balance between benefiting from experienced board members and expanding opportunities for others to serve. That said, it is important that directors who have served one term not be automatically assumed to be on the ballot for an additional term, but rather are included on the ballot based on their performance during their first term.” The handbook addresses roles as well, by stating: “Authorizing the president to assume a role beyond that of chairing the board risks violating a fundamental principle of the board governing and the GM/COO managing.”
The Governance Handbook can be purchased from NCA at the following link: Purchase Club Governance Handbook