Despite media reports to the contrary, the compliance requirements of all organizations have grown in recent years. The amount of time spent on compliance by private club boards, management and line staff has increased proportionately. The best approach is to be proactive and minimize, or better still, eliminate the risk of non-compliance. Global Golf Advisors recommends two measures to protect both management and the board from a costly and embarrassing non-compliance event.
The first is for management to develop a “compliance checklist”. It can be a simple Excel workbook that includes all the current requirements by department, the timing for reports/inspections, the person responsible and most importantly, the name, signature and date the item was completed. Why a simple checklist? Because the volume and complexity of our knowledge has exceeded our ability to consistently deliver it correctly, safely or efficiently. This was best described in a recent bestselling book, The Checklist Manifesto: How to Get Things Right, by Atul Gawande. Used correctly, a compliance checklist gives the GM one less thing to worry about.
The second is for boards to insist on a compliance statement/report at every meeting. The board cannot be expected to know whether the club is in compliance. Yet, in many cases, directors may be held accountable by outside agencies. The directors would certainly be held accountable by their fellow members if the club was closed even briefly for an environmental, labor or safety issue. It is something directors should require to fulfill their fiduciary duty and to avoid any litigation. Each time the Board meets, the GM/COO reports that “To the best of my knowledge, the club is in compliance with all known municipal, state and federal regulations as of (insert date).” You can also provide updates with this sample statement: “Specifically, the club received acknowledgement on (insert date) from (insert name of agency) that the club remains in compliance.”
Compliance matters in private clubs. The board and management each have a role to play.
This article was authored by GGA Director and Governance expert George Pinches.
