Tag: Policy

Board Priorities: Add Brand Management to Your Fiduciary Responsibilities

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There are typically three priorities that command the attention of private club boards: (1) developing and using sound strategy; (2) ensuring the financial security of the club; and (3) governing the club responsibly.  However, in these days of over-supplied markets and the ongoing regeneration of many clubs, brand management has become massively important to clubs.

Some board members claim that a private club is “private” and, therefore, not a commercial brand. These outdated beliefs are a sure-fire plan for damaging the long-term brand health of the club.

Private club board members share several fiduciary duties, which include the duties of care and loyalty, such as good faith, confidentiality and disclosure.  Directors’ duties also expand to the responsibility to protect the identity—which may include its trademarks, intellectual property and public-facing images.

Brand Planning and Security

What is your club’s brand? And how is it being protected?

A brand is a small piece of real estate “owned” in the mind of the consumer, according to Al and Laura Reis, authors of “The 22 Immutable Laws of Branding,” a marketing classic on branding commercial companies.  Some board members claim that a private club is “private” and, therefore, not a commercial brand.  These outdated beliefs are a sure-fire plan for damaging the long-term brand health of the club.

Brand health, which means admiration, trust and desirability, is an important duty for private club leaders.  Social media proliferation and unending public awareness and scrutiny of private clubs require the club board to pay attention to the club’s brand.  Club leaders should routinely execute a brand audit to validate the club’s market impact.

Strategic Planning

The club’s strategic plan is its long-term direction and scope of operations.  The plan helps the club stay focused on its priorities, and to fulfill stakeholder expectations.

Board members are responsible to fellow members to ensure that the club has a sound strategy and that the strategy is being faithfully enacted.  Directors are duty-bound to know the club’s strategy and ensure that it is preserved and routinely used.

A sound strategic plan extends for a period of three-to-five years and should be fully reviewed annually.

Financial Security

Directors are responsible to protect the financial resources of the club.  This means that directors must carefully measure the future financial needs of their clubs; plan for the sources and uses of funds; and ensure the economic sustainability of the club.

Economic sustainability requires that the club generates revenues adequate to pay the costs of the operation and to fund future capital needs of the club.

Board members must fully understand the club’s financial capabilities and limitations.  A key tool used to report the financial profile of a private nonprofit, tax-exempt club is a Department of Treasury Form 990, which each director should also understand.

Club Governance

Every club director should strive to provide sound governance to their club.  Effective club governance is built on the regular usage of the strategic plan and a board policies manual (BPM).

A BPM documents the methods that will be used in governing the club.  It also includes a description of the organization, the authority of the board and the manager, and the relationship of the board with the manager/COO.

The BPM is as fundamental to effective club governance as the strategic, financial and brand plans.  It must be developed and used on a regular basis.

Today, governing a private club is a bigger and broader job than at any previous time.  Brand knowledge and management have become just as important to the overall health of the club as other fiduciary duties, such as strategic planning and financial security.

GGA’s Henry DeLozier penned this article for the National Club Association’s Club Director Magazine.

Monitoring Club Performance through Board Policy

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Monitoring club performance is essential for the Board to be accountable to members. The trend in business and non-profit organizations is for data driven decision-making. Boards and GMs prefer objective measurement of goal achievement by using key performance indicators (KPIs) tracked on scorecards and dashboards. It is also important for the Board to evaluate its own performance regularly, at least annually. In essence, what gets measured gets managed.

The Policy Governance Principle of Rigorous Monitoring must be applied consistently through Board Policy.  Performance is best measured against agreed-upon criteria. Some of the items listed below are of a tactical or practical nature. However, they support Policy Governance principles and the Club Governance Model.

The Board’s Role in Goal Setting

The Board has an important role in not only establishing its own goals, but also in ensuring that the General Manager (GM) has every opportunity to be successful when establishing his/her annual goals. The Board is responsible for the following items:

  1. Determine the club’s strategy, its major goals and desired outcomes
  2. Set appropriate limits for the GM through the establishment of executive limitations policies
  3. Provide the GM with the authority, flexibility, and resources to successfully complete agreed-upon goals in the allotted time
  4. Specify the objective results goals, the ends – the term used in the Carver Policy Governance Model.
  5. Monitor Board and GM performance including holding itself accountable

Make Monitoring Club Performance a Board Policy

Monitoring club performance should not be left to chance. It must be set out in writing and agreed to, in advance, by the Board and GM. Monitoring is Board policy. The following items explain how to incorporate monitoring club performance into policy:

  1. Incorporate the club strategic plan, the Board and GM’s goals into the Board Policy Manual (BPM), directly or by appendices.
  2. Incorporate the monitoring of the GM’s performance into the BPM with sufficient detail to make monitoring as automatic as possible using a specified process, consistent documents and scheduled times.
  3. Incorporate the GM’s performance evaluation into the BPM for clarity and consistency.

Management’s Role in Goal Setting

Management must take an active role in setting goals and monitoring performance. A passive approach leads to undefined and unattainable goals resulting in poor performance reviews. As the Board’s only employee, the GM not only participates with the Board in setting his/her goals, the GM then communicates these goals to the management team. Ideally, the GM’s goals, and therefore the Board’s goals, are consistently communicated to every staff member to align all activity and maximize the use of club resources. Management is responsible for the following items:

  1. Determine the means – Once the goal is set and clearly defined, communicate to the Board that management will decide how the goal is accomplished. Management must secure the authority, within executive limitations, to accomplish the goal without the undue interference. Responsibility without corresponding authority defeats accountability. It is better to be reminded than instructed.
  2. Determine limitations – Report what cannot be done with valid reasons why and ensure that unrelated outcomes are not bundled into a goal. Goals must be achievable. This is often determined by a dues-based budget. Many clubs set stretch goals that cannot be achieved based on the level of funding from dues and other sources.  Avoid moving goalposts and undefined targets; management must be diligent in avoiding goal creep. Similarly, overarching subjective goals should be avoided.
  3. Establish the monitoring process – when-what-where-in what form-to whom. The timing of interim reports is particularly important. Simplify the monitoring and reporting process using KPIs, dashboards, and scorecards. A simple and clean visual representation is better than pages of text.

This article was authored by GGA Director and Governance expert George Pinches.

2018 Club Governance Model Executive Summary

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The Club Governance Model (Model), which was developed in 2007 and updated in 2018, is built upon accepted principles and best practices in nonprofit governance. Although this Model is directed primarily toward member-owned clubs, the principles embodied in the Model are no less applicable to clubs with a different ownership structure. The primary purpose of the Model is to optimize the most fundamental quality of a governance system – the smooth flow of authority from the club owners to the club staff and the corresponding flow of accountability from the staff back to the club owners. The Model, as shown in the flow chart below, is simply a set of principles designed to keep communications throughout the organization clear and the roles of key participants unambiguous.

The extent of the changes required of a club to implement the Model will depend on the governance system that it presently employs. However, the ease of implementing the Model will depend less on the number and extent of changes needed and more on the commitment of the club’s leaders, namely, the President, the Club General Manager/Chief Operating Officer (GM/COO), and the Board members. A club that is considering the Model for its governance structure and processes must not only assess the necessary steps in moving to the Model, but it must also measure the resolve of its leaders to follow through on the implementation. The caution to be followed here is “don’t start the process unless you have the commitment to finish it.”

Implementing the Model will usually involve amending the bylaws, although the changes recommended are usually straightforward and non-disruptive. The implementation step that will call on the greatest effort, and therefore commitment, is the development and eventual employment of a Board Policies Manual (BPM). From the time that the Board approves the initial version of its BPM, this important document can serve as a governance management system that provides a clear-cut path to success. As with any good system that is utilized on an on-going basis, the BPM will be continually modified and refined to respond to a changing environment. As the Board rely more and more on the BPM to be its single and clear voice, it will reinforce the underlying principles of the Model and allow the club to accrue the substantial benefits of an efficient and effective system of governance.

Overarching – From a high-level perspective, boards are meant to only serve a strategic role whereby their main function is safeguarding assets and evaluating and developing long-term strategic options. The role of management is to operate the club, while committees are meant to only serve an advisory function, with no authoritative or executive powers.

Board Members – Board members are, of course, club members. As such, they are customers, and volunteers. Board members are also trustees or governors in that they are elected to govern the affairs of the club subject to limitations that may be set out in the bylaws. But Board members have the authority to govern (i.e., are “governors”) only when they are taking part in an official Board meeting. Even though Board members are often active in committee meetings or efforts to assist the GM and his or her staff, when Board members are not in an official Board meeting, they are serving as volunteers and not governors.

Club Officers – Club officers, typically the President, Vice-President, Secretary, and Treasurer, are normally Board members with special responsibilities in addition to their duties as Board members. They are usually elected by the Board and subject to the Board’s authority and direction. As such, they have the authority only when it is granted by the bylaws or the Board. This means that the President does not represent a separate level of authority and does not supervise the GM except as specifically authorized to do so in the Board Policies Manual. The President is almost always the Chair of the Board and is responsible for maintaining the integrity of the governance structure and related processes. He or she normally is the chief representative of the members and the spokesperson for the Board. As Chair of the Board, he or she sets the agenda of Board meetings and ensures that the Board stays at an appropriate level with its thinking, discussions, and policy development. The President is often an ex officio member of all committees. Therefore, he can serve both in a coordinating role among the Board Committees and in a leadership role in keeping them focused on their respective scopes of responsibility. The duties of other officers are not discussed here because they have less to do with the governance structure and processes.

Committees – As shown in Exhibit I, the Model contains two types of committees. The Board Committees support the Board in Board-level functions (e.g., Governance, Finance, and Programs) while the Operations Committees (e.g., Golf Committee, Green Committee, Tennis Committee, Food & Beverage) support the GM. Board Committees study issues and recommend policies that support decisions at the Board or strategic levels. Operations Committees serve the GM by offering critical member (customer) input and in sharing the workload by helping with events and activities. As critical as the committees are in supporting both the Board and GM, they serve in an advisory capacity, not from a position of authority.

General Manager – The GM is the single agent of the Board with responsibility to carry out the purpose of the club within the policy boundaries set by the Board. Therefore, he or she has operational authority to employ and allocate the resources of the club to serve its members so long as he stays within the boundaries set by the Board in the Board Policies Manual.

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This article was authored by George Pinches, a Director at Global Golf Advisors, who specializes in Club Governance. Reach him at gpinches@globalgolfadvisors.com.

Small Measures, Big Results

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Happiness, like a butterfly, can be elusive for golf course owners and operators challenged by the shifting tides of economics, demographics and lifestyles. But a new program from Audubon International, where I am honored to serve as chairman of the board of directors, promises some happier days for those with the patience to await the butterflies.

Over the past 20 years, populations of the iconic monarch butterfly have declined by 90 percent. A key reason for the decline is a lack of habitat, especially a lack of milkweed. As it turns out, golf courses represent a wonderful opportunity to plant milkweed and other wildflowers that provide sustenance and habitat for monarchs.

Marcus Gray, the director of Audubon’s Cooperative Sanctuary Program for golf, says: “Golf courses have been identified as having great potential for the development of monarch habitat. We estimate that there are at least 100,000 acres of available space on golf courses to help butterflies.”

No one is arguing that monarchs are the answer to golf’s challenges. But helping to save the king of the butterflies will have tangible benefits. When courses create monarch habitat in out-of-play areas, they increase the beauty of their course. They also make a statement about their commitment to sustainability. According to a 2017 survey by Pew Research, 75 percent of Americans are concerned about the environment and 1-in-5 acts on their concern. A separate Pew study found that women – by 17 percent more than men – are acutely concerned about the environment.

Millennials put their money behind environmentally concerned companies. According to Nielsen global research, nearly three-fourths of millennials support companies committed to positive social and environmental actions and programming.

“Brands that establish a reputation for environmental stewardship among today’s youngest consumers have an opportunity to not only grow market share, but build loyalty among the power-spending millennials of tomorrow, too,” says Grace Farraj, who leads Public Development & Sustainability at Nielsen.

Any courses out there not interested in appealing to women and millennials?

Audubon is making it easy to do well by doing good. Its “Monarchs in The Rough” program guides land managers through pesticide reduction, site preparation, planting and long-term maintenance of habitat for pollinators. “Our goal is to create at least one acre of new vegetation installed specifically to bolster monarch numbers on every golf course,” Audubon International CEO Christine Kane says. “Many courses have existing gardens and larger plots dedicated to wildlife already.”

The program is open to any golf course in Canada, Mexico or the United States. Superintendents can plan, install and manage monarch habitat on their courses by following guidelines published by Audubon. The program provides superintendents and staff with the information and technical support they need to incorporate monarch habitat into the unique layout of each course. Guidelines include how to plant and establish milkweed and other nectar-producing plants; track progress and manage the habitat; and procure native and ecologically appropriate plant materials, such as milkweed seed. In addition, superintendents can connect with the Audubon network of participating courses and communicate with their customers about the plight of the monarch and how they can help.

Monarchs in the Rough has the potential to provide up to 20 million milkweed plants toward a goal of 1 billion to 1.5 billion stems of milkweed available for monarchs. This amount of plants is what is required to maintain a robust population of butterflies at overwintering sites in Mexico.

Unfortunately, monarchs won’t add to membership rolls or fill tee sheets. But for the small effort required to save one of nature’s greatest wonders, they will certainly bring no small measure of beauty and appreciation. Happiness is, indeed, a butterfly.

This article was authored by GGA Partner Henry DeLozier for Golf Course Industry.

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