United States

Do your bylaws reflect your governance structure?

This important governance document needs to be updated accordingly

ECLUB NEWS  | 

As clubs have evolved in recent years and embraced a general manager(GM) or chief operating officer(COO) structure where boards lead, managers manage and members enjoy, often one of the most important governance documents has not been updated accordingly–the club bylaws. One of the most obvious examples of this relates to the contract approval processes.

Often the contract signing policy in the bylaws does not appear to reflect the practicalities of how the club operates. The bylaws often retain the language of a former governance age where the contract signing policy typically states something along the lines of “the president shall, with the secretary or treasurer, sign all obligations, contracts in excess of $5,000 or for a term in excess of one year, deeds, mortgages, promissory notes and other instruments as approved by the board unless otherwise provided by the bylaws.” In most clubs, such a policy would not reflect what actually happens on a daily basis where routine contracts are typically signed by the GM or COO, without reference to a board member.

While many clubs have a “roles and responsibilities” governance matrix, which might state that the GM may “if authorized, sign and execute contracts,” it is recommended that the bylaws be reviewed and amended as necessary to align with current practices within the operation. Any amendments should be communicated to all management personnel and department heads who should, in return, provide written acknowledgement of the policy. The last thing any GM, COO or board member needs is a disgruntled member making accusations that club contracts or similar instruments are being signed by nonauthorized personnel. Check your bylaws now and ensure they reflect the operational realities of your club.