When Compliance Meets Health and Safety

This article continues a series of communications from GGA Partners to help private club leaders address challenges confronting their businesses and their employees as a result of the global health crisis. Today, Michael Gregory, a partner of our firm, discusses options and alternatives for clubs with pending annual meeting requirements.

With annual meetings and general elections upcoming, how should clubs meet what may seem conflicting obligations?

As the health crisis evolves, so too do the number and magnitude of issues facing club leaders. One that most take for granted – the annual general meeting and member election – now raises a difficult, if not contradictory, predicament: complying with club bylaws and government restrictions while protecting the health of members, families and employees.

First, know the law.

Is your club located in an area with a state or local government order prohibiting nonessential transit or in-person meetings? If yes, your decision is easy: the club cannot hold the meeting, notwithstanding bylaws that may require it.

According to Glenn Gerena, a shareholder at Greenberg Traurig and a community development and hospitality attorney, “If the club cannot have a virtual meeting under law or its bylaws, the board should discuss with counsel whether the government order gives the board a legal basis to hold a meeting on a virtual [platform] and, if not, to reschedule the meeting to a later date.”

If there is no state or local prohibition regarding an in-person meeting, the club should consider whether it can hold a virtual meeting according to its bylaws.

If your club decides to proceed with an in-person meeting, it is important to provide for proxy voting by mail and encourage all members to stay home and to vote by mail. For members who choose to attend the meeting in-person, the club must observe all health and safety protocols as defined and advised by their local government authority.

Should you go virtual?

Deciding if your club should hold a virtual annual meeting should involve discussions with your legal counsel. Counsel should review applicable state statutes, which may require in-person meetings, permit virtual meetings or defer to the club governing documents. The state statute will govern if bylaws directly conflict with it.

For example, most clubs in California have adopted section 7510 (f) of the California Corporations Code, which allows for electronic meeting and voting and, in cases where state statutes and bylaws conflict, the state statutes supersede the club’s bylaws.

Legal counsel also should review the latest state and local government orders related to the COVID-19 crisis.  For example, the Connecticut governor issued an executive order on March 21, 2020, giving corporations the ability to conduct annual and other shareholder meetings by remote means.  Similarly, for clubs in Canada regulated under the Corporations Act (provincial and federal), orders have been announced to allow members to meet and vote electronically.

“If neither the state statue nor bylaws expressly permit virtual meetings, the club’s board of directors should review bylaw provisions governing amendments and board powers to determine whether the board can amend the bylaws to permit virtual meetings and online voting,” adds Gerena.

In uncharted waters, rely on reason and caution.

While all clubs are encouraged to seek legal counsel to inform and qualify their course of action, club leaders should expect to be operating in uncharted waters and seek to act reasonably and cautiously in the current environment.

“If prudence does not make it possible to meet, then clubs need to consider alternatives,” said Van A. Tengberg, a real estate acquisition and development attorney at Foley & Lardner LLP. “I would not recommend deferring the annual meeting and allowing the board to serve longer terms.  If your bylaws do not allow virtual meetings, then clubs need to consider different options that provide members a reasonable and safe process to meet and cast their vote.”

As with all things in this new normal, communication (and even pulse surveys) that increases members’ understanding of circumstances and current limitations will be appreciated and rewarded and, in this case, may even help to mitigate potential future risk.

In an upcoming article, Michael Gregory will discuss options and solutions to complete a virtual annual meeting and an online vote. Contact Michael at michael.gregory@ggapartners.com or 416-524-0083.

Season Proofing Your Club

For clubs facing seasonal challenges, maintaining member engagement year-round can be challenging. GGA’s Stephen Johnston provides insights on how to keep members connected to your club – whatever the weather.

Risk. This is the first word that comes to mind for clubs poorly positioned to appeal to existing or prospective members during the off-season.

Increasingly, we are witnessing a changing demand landscape. Prospective members are looking for a club to engage with year-round, one that provides and prioritizes the amenities and programs to support this desire. At the same time, existing members are assessing the value of their membership in the context of how often they visit or engage with their club. If their relationship is closely associated with seasonality, leading to them becoming disconnected during the inclement months, Mother Nature is likely to play too big a part in this value assessment.

Crucially, developing amenities which enhance year-round use of the facility not only helps to attract new members, it also increases engagement and satisfaction among existing members. But how do you realize this opportunity and secure this much needed season-proof longevity for your club?

Where to start

Assuming funding available for new amenities, the first port of call should be to obtain input from both members and non-members. This will provide robust, evidence-based support to develop the case for additional amenity provision.

Naturally, the market will dictate the type of amenity you are looking to add or develop, but – to offer an insight into recent trends – clubs facing seasonal challenges are focusing their investments on additional food and beverage outlets (family dining, more diverse dining options); fitness and wellness (indoor and/or outdoor pools); dedicated areas for children or adults, and high definition simulators or teaching studios.

A number of clubs have taken a different approach to the same challenge, choosing to focus on the corporate side of their business by developing dedicated business centers or expanded banquet areas for special events.

Making it work

Developing a new amenity from scratch is no small undertaking, but the objective, ultimately, is for it to become a meaningful addition which resonates with both existing and prospective members.

From surveying members and non-members, you will have a clear idea of which amenity is most highly prized among members. While this is a solid platform from which to move forward, you are likely to lack the critical detail of how much members and prospects would engage with this new product or service.

My advice is to ask members what their anticipated utilization is before proceeding with additions. Any new addition should be scrutinized from a financial perspective and compared with existing assets. A picture will then begin to emerge, one that determines whether the new amenity is viable, both in isolation and in the context of other, existing assets.

Secondly, complete a market study and invite potential members and existing members to participate in focus groups. This will help to establish whether the additional amenities would make the club more relevant to them year-round. Don’t underestimate the power of taking the time to ask other’s opinions; by showing that you put your members’ opinions first, you may well find the non-members who participate actually decide to join the club themselves, something we have witnessed on numerous occasions.

In any case, research mitigates risk. Be shrewd with your research efforts and focus these on the period before any development takes place. This avoids unforeseen challenges once the work has commenced.


Embarking on new amenities or developing existing assets should be done with the future in mind. A season-proof club is one which keeps its members continually engaged throughout the year, year-on-year, promoting sustained high levels of satisfaction and an increased propensity for members to recommend the club to their friends.

However, additional amenities alone are not enough to achieve this harmony. To meaningfully realize the benefits of such addition(s), the club should focus on maintaining its standards of excellence and promoting events or programs which encourage use of the club and interaction with other members on a regular basis.

The proactive approach

When you set out to confront the seasonality issue, do so on the front foot; be proactive through seeking guidance from members and non-members. You and your board may well have instincts on how to tackle the issue of seasonality, but these alone are not enough when making pivotal decisions with a lasting impact in shaping your club’s future. Develop a plan, own the process and seize the opportunity that the off-season presents rather than fear the time it comes around.

This article was authored by GGA Partner Stephen Johnston.