Private Club Board Orientations, Training and Retreats
Private Club Boards should conduct orientation sessions that address legal obligations, roles, financial training, long-term capital planning, an agenda, and committee charges.
Board and committee efforts need to be organized and all Board members, new and returning, need to be periodically educated on their duties, responsibilities and the goals of the club. An orientation shortly after a Board transition provides the perfect opportunity to get everyone on the same page, at least for a short while! It is not just an orientation in our view; it is a kick-off meeting as well. The orientation should be supplemented with additional training sessions and/or retreats when more in-depth discussions of certain topics are required.
In general, in addition to a tour of all facilities and introductions to key staff members, we believe an effective orientation session should include the following:
- Overview of legal obligations and duties
- A clear delineation of the Board responsibilities vs. those of management
- Facilitated training on the finances of Private Clubs
- A review of the Long Term Capital Plan and Strategic Plan (if available)
- The Board’s agenda for the next year
- Committee charges for the next year
We’ll discuss these topics in a bit more detail below.
Board members have several legal obligations to the Club as a whole, not to members individually or as a group. Board members must act in good faith, with the care of a prudent person, and in the best interest of the Club. The duty of care and duty of loyalty apply to all board members. At a minimum, Board members must attend meetings, being informed about the business at hand and exercise independent judgement in discharging his/her duty of care. Regarding the duty of loyalty, Board members should act in allegiance to the Club free of outside influence. In fulfilling this duty, Board members should disclose all conflicts of interest in accordance with an established policy (including an annual written statement), avoid diverting opportunities of the Club to him/herself for personal gain, and respect the confidentially of all sensitive Club business matters. Maintaining confidentiality is often the most problematic issue in private clubs. There is far more to know about each of these duties and to be covered in the orientation, but a more in-depth discussion here is beyond the scope of this overview.
There is often a blurring of the lines between the roles of the Board and that of Management. This makes the job of General Manager extremely challenging. We like to keep it simple. The Board should focus on the 3 P’s: Policy, Planning and Problems. The management team, under the direction of the General Manager who reports to the President, is responsible for all day-to day operations and the achievement of annual goals. As Private Club Board members, many of us are guilty of crossing the line at times. We need to keep reminding ourselves of the confines of our roles.
Private Club finances are more complex than most think and it is easy to get tangled up in unproductive discussions. It is very important to understand the key performance drivers of Club’s in general and what truly matters in operating any Private Club. Arrange for proper training so that each Board member can be productive from the start. With Board terms typically being just a few years, it is important to get up to speed quickly.
Long Term Capital Planning
If you’ve read our other pieces, you know we firmly believe a long term capital plan is the roadmap for the Club’s future. Modern, well cared for amenities are an important component of satisfying and retaining existing members and attracting the next generation of members. Board members need to understand the plan, and all underlying assumptions, as well as all projects in process from the very start. If the plan needs to be change, change it, but everyone needs to be on the same page. If the Club has undertaken a strategic planning effort, it should be reviewed periodically and updated as necessary. If your Club has not developed either of these plans, get started!
The President, working with the Executive Committee and the entire Board, should develop an agenda for the upcoming year that identifies and addresses strategic issues. It is important to get management and all Board members on the same page about what’s to be accomplished over the next 12 months. Committee charges should be developed that support the Board’s agenda for the year. The agenda should be discussed as part of the orientation, or shortly thereafter, and modified as appropriate based on the discussion. It’s important to check back regularly to see if the Board is on course.
In order for committee work to be best aligned with the Board’s agenda, clear instructions for what the Board hopes to accomplish, and how each committee supports that mission, needs to be communicated. It is often helpful to think in terms of the year-end committee report. If the committee chair were to write the report in advance, what would it say? Committees tend to wander without clear missions, often to the frustration of all. It all starts up front. Get everyone on the same page. Why does “herding cats” come to mind?
Club Board Professionals is a strategic financial consulting and training firm. The Principals, Dave Duval and Joe Abely, assist clubs achieve excellence in three areas: governance, financial sustainability and membership satisfaction. Contact us for a complimentary initial assessment of your club.
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