Succession Planning for Board Members of Private Clubs
Private Club succession planning will overcome the challenges of term limits for board members.
Members of Boards of Directors of Private Clubs have short tenures (median term of 3-years) and at a vast majority of Private Clubs Board members are limited to 1 term. In comparison, Boards at public, private and not-for-profit entities typically have substantially longer average terms.
The dilemma for Private Clubs is that successful clubs undertake strategic plans and long-term capital planning that have a horizon of up to 10-years. Short-tenure Boards can easily cripple execution of these plans without an effective transition of thoughts and understandings to future boards as well as deprive a board (and the membership) of expertise and institutional memory. It is important that the nominating process addresses this need and recommends candidates that have some understanding of the Club’s plans, have the time to learn more, work well with others and are free of personal agendas.
Managing longer term views with short-cycle Boards is not ideal but it can be done with thoughtful succession planning and effective training programs for Private Club leaders. You must get Board members up to speed quickly. Effective Succession Planning for the Board and Officers is a critical success factor for Private Clubs.
Board Nomination and Election Process
Private Club by-laws typically spell out the process for the nomination and election of Boards and officers. Boards should take care to make sure that nominating process is executed in an effective manner. Most importantly, the nominating committee should consist of individuals who have a thorough knowledge of the Club and its strategic and long-term capital plans. The members of the nominating committee should also have a good knowledge of the membership as a whole. It is important that the nominating committee represents the interests of the membership as a whole, including families.
The nominating process should be very deliberate. The criteria for future board members should not be a popularity contest but rather address what new skills and competencies are needed to help the Club execute strategic and long-term capital plans.
Start Succession Planning With Committee Members
The best candidates to serve on a Board are generally those members who are both active at the Club and on a committee or two. Succession planning for Boards starts at the committee level. Those that serve and take leadership roles on committees provide the best candidates to serve on Boards because they have some knowledge about the Club and it's strategic and long-term capital plans. Their service on committees should have demonstrated a commitment to the Club. Whether provided for in by-laws or not, committee heads should be members of the Board. The selection of who sits on committees is an important role of the Board and its officers.
Both Boards and committees should represent the demographics of the Club so that all members feel their needs are represented. Most Clubs have mechanisms in place that allow for spouses to serve on Boards and committees. If not, this should be strongly considered.
Orientation and Training For New Board Members
For newly elected Board members, it is important that the Private Club have a Board Orientation and Training Program in place. Topics covered should include:
- Legal Obligations
- Roles of Board Members
- Financial Training
- Long Term Capital Planning
- Board Agenda for the coming year
- Committee Charges
One last recommendation: because of the rapid turnover of Boards, institutional memory of significant actions taken by the Board can be limited. It is not unusual for someone to have to comb through archives of Board minutes several times a year to determine what action (if any) the Board took on a particular item. Boards should consider preparing a historical summary of significant Board actions as a reference document for future Boards.
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.
© 2017 Club Board Professionals. All Rights Reserved