By Harvey Weiner, Managing Partner
PUBLISHED IN BOARDROOM MAGAZINE
The traditional paradigm for the structure of Boards of Directors has been virtually unchanged since the early twentieth century. Poll the leadership of just about any club whether country, golf, in-town, or yacht, and you will find that few boards have methodically selected their members by any systematic means. While most directors, if asked directly, would tell you that they have no interest in managing their club on a day-to-day basis. “That's why we hired a manager”, they'll say. The truth is, though the many would argue that they are not micromanagers, individual directors often interact with management and staff in greater minutiae than they even realize. This article addresses what, for many clubs, is their reality. The only judgment we make herein is that, if the directors and members of your club are going to micromanage anyway, let's structure an organization that acknowledges that tendency, protect them from themselves and corral their energy toward the greater good of the club and its members.
Rare is the club that has actually written job descriptions for directors, for the board itself, or even committees and their chairpersons. If the club's leadership lacks clearly defined criteria for evaluating their own actions how can they be expected to evaluate management and/or staff performance? How can you expect the president or nominating committee to fill vacancies on the board if they don't have a reasonable understanding of what will be expected of those invited? And why, other than the dubious “honor” of serving on the board, should anyone accept a nomination if he isn't provided with at least an outline of expectations?
A methodically balanced Board of directors is one that has focused on the needs of the club, which are then prioritized to define the ideal participants, their skills, talent, experience, expertise, contacts, credibility, affect, attitude, etc. The actual human asset ingredients are driven by the mission of the club. (If a mission statement has not yet been formulated now is good time to begin the process).
The challenge, of course, is to identify and recruit a blend of committed individuals, known to the club's president, chief operating officer and current directors, who possess the requisite expertise in those areas of most compelling and/or ongoing need. Depending upon present circumstances it may be beneficial to recruit a change-agent. At other times that same individual may prove to be disruptive. If the club is going through a challenging time financially then clearly someone with strong accounting and/or financial acumen would be a valuable asset. If there are legal issues to confront then an attorney can be helpful. The well-balanced board will have at least one of each of these experts on board at all times to anticipate and avoid such issues rather than waiting for a problem to manifest itself.
Boards of directors that have been built on personality, obligation, and hidden agendas generally become committees of the whole. Their meetings wander aimlessly into committee territory and may go on for hours with no real resolution of important issues. They may address the crises du jour or waste time lamenting something that could have been resolved before the meeting by the appropriate committee and presented by that committee's chairperson with a recommendation for an up or down vote of the board.
Committees can be excellent training grounds for future club leadership for it is in the committee meeting that members become aware, perhaps for the first time, of the issues facing their club. It is in committee meetings that single-issue members can get their stuff out of the way. Future leaders will emerge while others may decide they'd rather be on the golf course.
Here's a revolutionary concept: The primary role of the board of directors is to ensure the success of the club by deciding the right thing to do. (The manager's responsibility is to decide how to do it right.)
A word of caution on committees: When something can be accomplished by one person, and that individual has the necessary expertise and credibility, don't waste time forming a committee when he can do the job perfectly well, and possibly better, by himself. Alternatively, when the dynamics of committee deliberation will serve an educational purpose for those participating, or might achieve an outcome requiring greater credibility with membership, then, by all means, form a committee. Examples would be committees charged with the Mission Statement, Strategic Planning, Long Range Planning, Best Practices, and Capital Reserves. A good general rule is: If the results will require extraordinary membership funding, it is best to have a committee come out with that proposal.
Do Not Form a Committee:
▪ When one person can handle it
▪ When management can implement decisions within its present authority
▪ When task is within the ability of a director or already established group
▪ For insignificant matters
▪ For situations requiring prompt performance
▪ Of over ten people
▪ Of all like-minded individuals, of the same age, experience or same affinity group
▪ When a board decision has been made and management authorized to act
▪ To deflect blame
So, what is the current board to do as they move toward this more productive, efficient model? Why, form a committee, of course. Ah, but this committee will have a specific mandate and a brief life, perhaps three months at most. Their responsibility is to identify each component and function where the club could likely benefit from the injection of expertise. We confirmed the power of this process when we introduced and facilitated the program on behalf of several of our client-club partners. In less than one hour the stakeholders, whom we had invited to participate in our program, had identified all of the following areas of the club which, in their opinion, could benefit from the infusion of a higher level of expertise than was previously utilized.
Food & Beverage – service, product, price
Administration and Management
New Membership Marketing and Sales
Long range planning
Use of the Internet
Vision and Inspiration
Safeguarding Club Traditions
Management and Lay Leadership Succession Planning
Personnel Recruitment (Board and Management)
Tournaments & Outings
Having identified these 33 issues/functions, each director's portfolio should include a variety of relevant issues/functions with a brief job description related to these areas. The nominating committee then seeks candidates with relevant expertise and recruits them to either serve on the board or to be available for a period of say, 2 – 3 years, perhaps as the President and Chief Operating Officer's “Group of Special Advisors”. They would replace the Executive Committee under the old paradigm and be empowered to interact (non-legislatively) with the CEO or COO individually and as a group. They become, in effect, a brain-trust to both the board and management.
The board must be prepared to either remove or attrit non-contributing directors who either do not further the club's agenda or who impede its progress toward success, as defined in the club's mission statement.
In our New Model for an Effective Club Board of Directors, rapid and vigorous communication between infrequent Board meetings is essential. E-mail and fax-blasts are today's most effective link between directors and staff and among members of the board. Each director would be responsible for producing a brief report dealing with his/her portfolio, in writing, distributed via e-mail prior to each board meeting. Motions, for board approval, should be included so that directors may consider its merits prior to the meeting. Directors and Officers (D&O) insurance is a necessity as board members will contribute more toward the operation of the club than under the old paradigm and should be sheltered from personal liability. Meetings of the entire Board are to be held twice a year and will last between four and eight hours. Board members who do not contribute are to be given a notice after 90 days of nonproductive effort that the Group of Special Advisors recommends that they resign. If they do not resign, by vote of the Group of Special Advisors they can be removed from the Board.
Each Board member then is responsible for the special areas of his or her expertise. Each Board member is empowered and encouraged to work directly with staff and the CEO on the area where they possess expertise.
This paradigm may sound somewhat like the Cabinet form used to assist a President of the United States. For more information on this "Cabinet" form of a Board, please feel free to contact our office.
The author is managing partner of Dallas-based Search America®, International Board consultants for Private Club Management, www.SearchAmericaNow.com or 800.977.1784. Send your questions/comments to [email protected] or to Search America® 5908 Meadowcreek Drive, Dallas, TX 75248 or 8852 Bella Vista Dr., Boca Raton, FL 33433. © Search America