Quick-start Guide For Board Members – Best Practice Audit – #1 In A Series
Best Practices For Private Club and Association Board Members
Analysis From Our Best Practice Audit for Board Members
As noted in earlier writings, when we began our long journeys as Board members, treasurers and presidents of our respective clubs, it didn’t take us long to determine we could learn a great deal from peers at other clubs and consultants with broad industry perspectives. We formed a peer group of a dozen or so of the most successful clubs in the greater Boston area. Our group frequently shared and discussed information, observations and financial information for the betterment of all of our clubs. With much input from others, we developed and refined a list of Best Practices that we implemented at our own clubs.
Over the past 15 years, we have expanded our knowledge with an ever-widening circle of industry contacts and exposure to more and more clubs. We’ve converted our list of Best Practices into an annual survey with the help of some terrific General Managers and industry leaders. We’ve heard from many Board members how eye-opening the survey was to them. They, like most private club and association Board members, “didn’t know what they didn’t know.” It’s a great place for Board members to begin or continue their education and only takes about 10 minutes to complete.
This is the first in a series of articles covering what we observed in reviewing the recent survey responses of approximately 200 participants along with other publicly available information.
Our methodology included reviewing whatever IRS Form 990’s were publicly available for clubs participating in the survey. We looked for troubling financial indicators – declining dues revenue, declining capital base (net fixed assets), excessive and/or increasing debt loads – as well as GM turnover as gleaned from the schedules of compensation and industry position listings. We cross-referenced those results with the clubs reporting a lack of what we consider to be the most fundamental best practices; a funded long-term financial plan, good succession planning, meaningful board orientations, a documented strategic plan and judicious use of debt.
While far from a scientific study, our instincts developed over decades in executive management making decisions with imperfect information proved correct. There was a very high correlation of negative financial indicators and a lack of best practices in the critical areas described above. While the correlation between GM turnover and the Best Practice responses was far less clear, turnover was far more common in clubs reporting negative financial trends. Speaking anecdotally, we’ve seen too many GM’s take the fall for Board’s not planning properly and successive administrations changing course rapidly or taking on too much debt.
With that as background, we’ll dig a little deeper into the results of the most recent survey in the coming weeks. If you have not yet responded to the BPA survey, please visit our website. A link will be provided there. It is never too late to participate. We are also hard at work on a greatly enhanced version of the Best Practice Audit with added functionality. That will roll out later this year or early in 2020.
Dave Duval and Joe Abely, the founders of Club Board Professionals, LLC, are both CPA/MBAs with more than a dozen years each of private club board experience as directors, treasurers , and presidents. They successfully honed their skills while guiding highly-successful transformations of their clubs during challenging markets and economic times before forming Club Board Professionals in 2016. They’ve quickly become speakers, consultants, coaches and contributing authors to the industry.
For further information please reach out to Joe Abely at email@example.com or 781-953-9333, or Dave Duval at firstname.lastname@example.org or 617-519-6281.