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Chatter Central Committees a help or hindrance


Chatter Central is a reoccurring feature that explores activity and information posted online that impacts the private club industry. Last month a discussion was started in the McGladrey Club World group on LinkedIn. The conversation generated dynamic interaction that seemed worth summarizing.

McGladrey's Philip Newman introduced the conversation by posting:

"Given how much we are told that clubs need to run more like businesses, is there still a need for the traditional committee structure in the private club world? Consider the example of General Electric—a governance model of between 13 and 17 board members and only five standing committees for an organization of that size…Do committees in private clubs alleviate some accountability pressure from the board and indeed management? If members truly want their club run like a business, shouldn't they include governance structure in that goal? Hire professional management for every department and a club CEO for overall management direction, elect a board to provide strategic direction, [and] then let the professionals do their job, holding them accountable for failures and rewarding them for successes? Or would that be running our club too much like a business?"

Understandably, many of the comments regarding the need for committees focused on the need for members to feel involved. For example, one participant posted:

"For equity clubs, where members pay significant fees and want to feel like they own a portion of the club, unfortunately the tendency is to what representation via committee. I am not advocating this – I am totally of the opinion that less (committee) is more (achieved...by the staff), but the reality is that when people have more skin in the game, they want to be a bigger voice."

Differentiating between that feeling of involvement as owners and that of micro-managing professional staff is a critical issue. If clubs want members to have a voice, beyond the board, they might reflect on the role of focus groups and town hall meetings. Are committees really a representative voice of the membership? Consider a typical committee formation: the board appoints the committee chair who in turn appoints the committee members. What are the odds that the people appointed think similarly to the board or chair? What are the odds that a balanced representative section of the membership will make it to committee?

In that vein, a participant posted:

"Committees do serve an important role; that as an advisory group who provide meaningful input, opinion and suggestion to management. The important ingredient in maintaining that advisory status is the level of confidence the Board and the membership have in its highly skilled GM, COO or CEO (whatever you want to call the day to day operational leader of the Club). Also important are a clear set of policy documents defining the role of the committees and an effective board and committee orientation program."

The online discussion turned to the more focused question of how to manage committees.

"Committees are a foregone conclusion with private clubs. The trick [is] for the GM to manage those committees so that they do not become involved in the operations of the club."

"Committees are part of, and integral to, the long-term success of a private club, especially in C-7's. Managing the board, and subsequently the committees, is part of the duties of the GM/COO/CEO. There must be clear policy defining the responsibilities of staff, board, and committees and it must be adhered to. I would also add that a sound Long Range Planning Committee is just as important as the Finance Committee in my opinion, although the FC will see more action. There is also an absolute place for a sound functioning Executive Committee, especially in the decision making process for matters concerning the BOD and its duties! The Board's (and Committee's) primary responsibility is the long-term direction and well being of the Club as an institution. Now look at the flip side, committees are mission critical as they also ensure relevance in club activities and initiatives as they relate to the membership by segment. Member involvement at the committee level is crucial in engaging participation in event and activities, as well as assisting in the matriculation process. Who better serves as insight into what potential members want, than the current members you already have. Committees have tremendous inherent value if managed correctly and with adequate policy guidelines. The real question is how to turn your committees from liabilities into assets!"

The conversation continued when a question was posed about how clubs ensure the number, size and involvement of committees makes sense for a club. With everything else being put on the table for evaluation during the recession, has appropriate committee structure been evaluated as critically as everything else? Should it not be if clubs have had to change how they conduct business in turbulent times?

The responses were again interesting.

"Now that's the $100 question! Many old Clubs have either held on to the structure they have always had, or conversely, done away with committees and lost touch with their members and staff. Within club governance you must define which committees are imperative to success operationally and financially, and become almost standards. Long Range Planning, Finance, Executive, and Membership Committees. The secondary committees will change from club to club, based on factors such as programming, demographics, club type, does it overlap with an HOA/POA, etc. Committee roles and responsibilities should be clearly defined, and managed by the BOD appointee or committee chair. Then, there is the occasional need for a "subcommittee" tasked by the BOD or EC with specific focus. Think construction committee, debt restructure committee, etc. What many clubs lose sight of is that many committees needs absolute sundown dates and are not meant to be perpetual. This should be visited no less than every two years to eliminate redundant, or no longer needed committees. Effective committee governance requires considerable "dynamic rigidity" as the clubs needs change."

"If we run Clubs more like a business, then we need well defined committees (depending on the Club), with a specific function, to maintain that sense of belonging for the Members of the Club, and this sense of belonging supports the concept of matriculation and reduces attrition. The more challenging question should be, how do you manage your committees in today's times? How do you keep them interesting and productive? How do they help your matriculation and decrease your attrition? How do you select Members for your committees? Do you have a mission statement and job descriptions for your committees, if not why not? Does each of your committees have a specific frame of reference / defined area of responsibility? What initiation tools/training do you have for new members on the committees (documents etc.) to help them better understand their role and responsibility in regards other members, prospective members, staff, suppliers, the law etc."

The discussion was concluded with a poll that asked if group members agreed that well run private clubs have limited need for committees.

Poll: Well run private clubs have limited need for committees
Agree: 59 percent
Disagree: 40 percent

Perhaps the gap between arguments can be bridged with an old Irish proverb. "The best committee is a three person committee where one person is always out sick and another is always on vacation."

Remember to join the conversation on LinkedIn in the group titled McGladrey Club World.