Club Governance - FAQs

Frequently Asked Questions

This portion of the Governance Section of the CMAA website contains answers to questions that we have received from members about governance issues and practices. For the initial list of questions, we have concentrated on the questions that we have received concerning the Club Governance Model. We have also begun collecting questions that address more specific governance subjects – nominating process, committee roles and procedures, meeting efficiency, strategic planning, etc. As the list of questions and answers grows, we will organize it by subject area and link individual answers with other materials in the Governance Section.

We encourage you to submit your governance questions to: governance@cmaa.org. You will receive a direct answer to your question via email. We will then post the question and answer on the website. When you submit your question, please let us know whether you want us to include your name on the question when we post it to the website. Otherwise the source of the question will be left blank.

Club Governance Model

Any change in the way a club is structured or the way it operates will be met with legitimate questions and often outright skepticism. What follows are questions that we have heard in response to explanations of the Club Governance Model in general and the BPM in particular.

Q1: Our governance system isn’t broke. Why should we go to such great lengths to fix it? For example, the BPM seems like a lot of bureaucratic effort for little return. We have our House Rules and our Golf Club Rules, which the Board addresses and changes from time to time, but we don’t need much more in the way of documenting Board policies.

A1: All clubs and their Boards have policies – both written and unwritten. Often the written policies are tucked away in past minutes known only to a few current Board members and maybe a handful of past Board members. With some clubs the unwritten policies are simply “whatever the President or the Executive Committee says they are.” Unwritten policies tend to drive out written policies because Board members begin responding to “the way things are done around here” rather than to a documented set of policies.

Boards that govern primarily from unwritten policies normally have a learning curve that new members are required to climb. Sometimes, the steepness of the curve is worn like a badge by the “old hands.” Mounting the learning curve is considered a sort of initiation or rite of passage for new members. Unfortunately, this is too often the mentality of those who like the oral tradition, who feel safer in subjectivity, who prefer to rely on institutional memories, or who presume that the policy at the time is whatever the Board chair or the General Manager (GM) says it is. This type of rationale should not be the basis for forgoing the benefits of a BPM.

A Board policy is a statement of the Board to the GM designed to influence how he/she manages the Club. The GM will in turn have policies for the staff across the various management functions – food service, golf course maintenance, accounting, and so on. The objective of the BPM is to put in one place the boundaries on the actions of the GM as set by the Board.

Under the new Model, there are only written policies – those in the BPM, which represents the single voice of the Board. There is no “lore” of unwritten policies or any steep learning curve for first year Board members. Nor does the GM need to guess what the boundaries are for his/her actions. If the GM is within the policies in the BPM, he/she is within his/her authority. The time taken to document the policies in the BPM is far less than the time wasted by various participants in the governance process trying to learn the unwritten policies. That fact is not changed by putting the pejorative label of “bureaucratic” on the BPM. Hundreds of nonprofit Boards have benefited from writing out their policies in a BPM and are using it as the primary tool in their governance process. It’s time that clubs receive the same value from this best practice.

Q2: What do mean by policy?

A2: This question is fundamental to understanding good club governance. To put the answer in context, the term governance can be simply defined as the making and administration of policy and the term policy simply defined as a course of action or directive from a person of higher authority. We sometimes hear that the Board develops policies and the General Manager (GM) implements them, but that’s not quite correct. When we refer to policy, it is necessary that we identify the type of policy, which is determined by its source, i.e., the person or entity who is issuing the directive. For example, member policy is determined by members, Board policy by the Board of Directors, and operating policies (or procedures) by the GM. Policies flow down through the organization – from the members to the Board to the GM and then to the staff – with each level of authority being subject to the policies of higher levels of authority.

Q3: Who decides when something is a policy?

A3: Member policies are listed in the bylaws, which for most clubs are determined by a vote of the members. When members vote on the bylaws, they are making policy – they are directing the Board to do this or that. Skipping over the Board for the moment, GM policies are determined by the GM and usually published as Standard Operating Procedures, i.e., directives for the staff.

While member and GM policies are easily recognized, identifying Board policies at clubs can be a bit of an adventure. Many clubs have Board Books that include everything from a description of the Nominating process to a reprint of the lunch menu at the Grill. Other clubs rely on the minutes to record resolutions, which are considered the library of their Board policies. Still others turn to the President for the current Board policies. For those clubs that have adopted the Club Governance Model, Board policies are clearly stated and organized in the Board Policies Manual (BPM). If it can’t be found in the BPM, it is not a Board Policy.

Q4: Where do you draw the line between types of policies? What distinguishes member policies from Board policies and then Board policies from GM policies?

A4: The short answer to your question is that the line between policy types is drawn by the higher authority. The members determine what they want as their policies, i.e., their directives to the Board. The Board then decides what decisions it will make for the club and what it will delegate to the GM. The Board can make any policy that is within the authority given it in the bylaws. That policy can be as broad as simply passing all of its authority to the General Manager, i.e., “the Board delegates the full authority given it in the bylaws to the General Manager to carry out the mission of the club.” At the other extreme, the Board may take responsibility for all rules and decisions within its authority, leaving the GM to be nothing but an order-taker. The challenge is where to draw the line between what the Board decides and what it leaves to the GM to decide. For example, some club Boards allow their GMs to make all decisions on staff salaries and bonuses. Other Boards may say that the GM makes all salary decisions except for certain key people, e.g., the Golf Professional, Green Superintendent, House Manager, etc. Another example of “drawing the line” may be in the area of signatory authority. The Board may have a policy that grants check signing authority of a certain amount to the GM without restricting whether he/she delegates that authority to the Controller. The GM may in turn have a policy that gives his/her Controller check signing authority of some lesser amount.

Once the Board determines where to draw the line between the decisions it delegates and those that it keeps for itself, the next challenge is documentation, which is drawing the line so everyone can see it. Remember (see answer to Question 3), if it’s not in the Board Policies Manual (BPM), it’s not Board policy. Part 5 of the BPM is effectively the result of the Board’s exercise in “line drawing.” There are five parts to the BPM. Parts 1-4 contain Board policies at a high level dealing with matters of board responsibilities, structure, processes, and relationship with the GM. By the end of BPM Part 4, the Board has described its job, the way it will do its job, and the way it will broadly delegate its authority to the GM. In BPM Part 5, the Board then lays out the limits on the GM’s authority, i.e., those decisions that it (the Board) will make. Part 5 is typically organized by Board function, e.g., Finance, Culture and Communications, Programs, and the like.

Q5. Our Secretary keeps excellent minutes during our meetings, which can be searched using available software. Why do we need another layer of documentation like the BPM?

A5: Most Board minutes, even those written in considerable detail, are written in narrative fashion. Even though they are normally required by law, meeting minutes are rarely written with the kind of specificity of well-constructed policies. More than to articulate policies, minutes tend to document Board actions and to reflect ad hoc, time specific decisions. Archives of minutes usually constitute very inefficient libraries of policies and resolutions -- and using them to research policies, even using computer search tools, is often clumsy, inaccurate, and time-consuming.

A Board that is careful about its minutes, both in substance and in process, will certainly have an easier time researching the minutes archives for past and existing policies. Even in these cases, however, the Board loses the clear value of the BPM as the single voice of the Board, a concept that encompasses not just plain vanilla policies and Board resolutions, but also the strategic direction of the organization, Board style and structure, and the GM/Board relationship. In addition, assume you are an incoming Board member and you have a choice as to how you become oriented to your new job. Which of these scenarios are you likely to prefer?

Scenario 1: Review several documents, including (1) statements on vision, mission, values, strategy, and current goals statements; (2) minutes of Board meetings from the past five (or more) years; (3) a description of the Board, including officers, committees, protocols, periodic reports, and the expectations of Board members; and (4) possibly a list of policies, which may or not be in the minutes that you reviewed in step (2) above.

or

Scenario 2: Read the BPM, which covers all of the material above.

Scenario 2 is a decidedly more efficient path for orienting a new Board member. Moreover, the same lopsided comparison applies to anyone who wants to learn about the organization – club members, prospective club members, outside auditors, or others. The BPM rarely includes information of a confidential nature or for Board members’ “eyes only” and Boards with transparency as one of their values have found the BPM to be particularly effective in reinforcing that value. This is especially true with clubs where the Board wants to maintain clear lines of communication with its members.

Q6: The Club Governance Model seems over-engineered and the BPM too formal. Our club is known for its relaxed and friendly environment. Wouldn’t the heaviness of the new Model and its BPM threaten our culture?

A6: For most clubs, their culture is their brand and they guard it jealousy. And rightly so. The stronger the club’s reputation, the longer its waiting list for new members. As one of the primary determinants of reputation, a club’s culture is well worth protecting and preserving.

But how does a club go about protecting and preserving its culture? Usually it’s by clarifying what it expects of its members, its leaders, and its staff. Its values can be found in the House Rules, in the mutual respect shown between members and staff, and in the quality of service that is delivered to the owners. For culture to be protected, it must be intentional and clearly articulated. Accordingly, so far from threatening a club’s culture -- be it formal/informal, traditional/modern, or family-oriented/adult-oriented – the Club Governance Model serves to clarify and preserve it. The values that the club holds dear should be embraced by the Board and repeated in its policies – in writing. Just as the House Rules state policies respecting decorum and behavior within the club, so too the BPM states policies that the Board will honor in carrying out its duties.

Q7: Our General Manager is not ready to be the CEO or even the COO or even the “sole agent of the Board” as shown in the CGM. Why should we put him in a position where there is a good chance of failure?

A7: This is a legitimate concern for the Board. It has a responsibility to work with the GM to help him/her succeed. But making the GM the “sole agent of the Board” does not mean giving him/her carte blanc to run the club. It simply means that the Board is clear on the boundaries within which the GM can operate. As with any profession, there is considerable variance in experience, skill sets, training, and willingness to lead among GMs. It is the Board’s responsibility to know how to delegate its authority so that the GM can carry out his/her duties within the authority limits.

Whether your Board chooses to designate the GM as the CEO, the COO, or something else, the Board has the responsibility to employ the most appropriate way to work with its “one agent to the organization.” For example, a Board that requires an experienced GM to get its approval to hire staff may be making work for itself and frustrating (and eventually losing) a good GM. On the other hand, with an untested GM, a Board may need to impose more restrictions in the form of executive parameters in Part 5 of the BPM. As the GM demonstrates capabilities in the respective areas, the Board can reduce the strictures. By working with the GM to arrive at the right balance of Board policy parameters, the Board can keep that balance between monitoring and meddling.

Finally, you might have a GM who has the potential to be a CEO or COO if just given the chance. By working together on the BPM over time, both the GM and the Board will contribute to their relationship, to their mutual growth, and ultimately to the efficiency of the governance process.

Q8: What’s the difference between the Club Governance Model and the COO Model that the CMAA has advocated over the past several years?

A8: The primary difference is that the Club Governance Model contains more detail on the matter of the Board’s role, its structure, and its processes, all of which are articulated in the BPM. These differences are more extensions of the COO Model than they are major changes, but they are significant in that they bring an extra measure of clarity and continuity to the governance function. Greater clarity is achieved by plainly defining the roles of the key participants so that there are clean lines of authority and correspondingly clean lines of accountability. The greater continuity results from the fact that it is the Board that sets its policy, not the President or the Executive Committee. Therefore, even a Board that turns over a third of its members each year has two-thirds of the members to maintain the continuity of policies. As effective as the COO Model has been, it is still subject to the potential unevenness of the relationship between the President and the GM. This stems in large part from the President’s term of office, which for most clubs is one year and sometimes two years. And if your President is the CEO of the club, ask yourself this: would you want to invest in a company that changed its CEO every year? Even if the criteria for selecting the CEO stayed relatively constant from year to year, would you want the operations of your business to fluctuate annually with the change in the personality or leadership style of the CEO?

Q9: CMAA has been advocating the COO Model for years. Why is it now suggesting that clubs scrap the COO Model and adopt the Club Governance Model?

A9: Until CMAA began recommending the COO Model, club leadership and governance severely lagged behind businesses of the same size and complexity. It was not surprising that in management and leadership literature the “country club” label was used to exemplify businesses that had a high regard for people, but little regard for productivity or efficiency. The COO Model represented a meaningful, but also manageable move toward the more efficient business approach. Clubs that adopted the COO Model saw considerable improvements over the traditional model. The Club Governance Model brings the club leadership and governance structure even closer to the best practices in business and modern nonprofit organizations. Far from scrapping the COO Model, we see its features and principles in the Club Governance Model, making the transition from the COO Model much easier. Ten years ago, there were few clubs that would have been ready for the Club Governance Model. Now there are hundreds of clubs that can take advantage of this approach.

Q10: Isn’t your support of this new Model just another way to justify salary increases for CMAA members?

A10: CMAA exists to serve club managers and it has worked hard to equip them to deliver better service to the members of their clubs. Successful clubs pay salaries commensurate with the level of satisfaction of their club members. All the promotional material from CMAA will not change that fact. Just as clubs found the COO Model to be a more efficient way to deliver quality service, we believe that they will find real value in adopting the Club Governance Model.

Q11: For the last four years, CMAA has recommended that clubs use its Director’s Guide for Understanding Club Governance as its primary governance reference. Now it is holding out the Club Governance Model and the Implementation Guide for the Model as the “standard of excellence.” What do we do with the Director’s Guide?

A11: The Club Governance Model is a framework for club governance that incorporates or accommodates the various best practices that are contained in the Director’s Guide. There are 60 best practices in the Director’s Guide along with substantive material on how and why these practices should be employed. The Club Governance Model does not supersede these best practices, but rather provides a framework for how they are incorporated into the Board’s structure and processes. For example, the Director’s Guide recommends the GM/COO approach as a best practice. The Club Governance Model supports the use of the COO Model, but also suggests that there are advantages to the GM/CEO approach. This is more a matter of preference than of conflicting guidance. The GM/COO approach was an improvement over the more traditional approach in that it helped clarify the roles of the Board and the GM. The GM/CEO approach enhances the GM/COO approach by being even more specific as to these critical roles.

At a general level, therefore, those who are implementing the new Model would be wise to start with this Guide to Implementation to establish the framework for its governance and then use the Director’s Guide to inform its thinking on the individual Board policies that will go into the BPM. In the future, CMAA may consider merging the two guides, but in the near term, the two publications serve different purposes and provide complementary guidance.

Q12: We are careful to choose Presidents of high stature and competence. We want them to be involved in leading the club. We also want them to get the recognition that the position deserves. Why would we want to downgrade the role and the prestige of that position?

A12: Making the GM the CEO or the COO is about strengthening the club, not about weakening the President. Most club members don’t know or care about the titles CEO or COO. They want to be provided good service and to have their culture preserved in the most efficient way possible. The President under the Club Governance Model loses no prestige in the eyes of the club or the community. He/she is still the highest ranking of the members and responsible for chairing and managing the Board, which has direct authority over the GM.

Nor does making the GM the CEO or the COO reduce the amount of Presidential involvement. Even when a decision is GM’s to make, a wise GM will still seek the counsel and good offices of the President. The question here is one of clarity of roles. The best practice in the nonprofit sector is unambiguous on the matter of the GM being the single agent of the Board – not the single agent of the President or the Board Chair or the Executive Committee. In addition to being a matter of clarity of roles, it’s also a matter of sanity for GMs, who don’t need to see their direct reports change every year. Under the new Model, the Board as a unit represents the members in the authority chain and GM is accountable to the Board as a unit.

Q13: But the Board also changes from election to election. Doesn’t that dilute your point on the continuity of the new Model?

A13: That’s where the BPM comes in. If the Board has taken care to document its standing policies, the impact of the changes in the Board profile (i.e., new members) will be attenuated. Introducing a new Board member or even a slate of new members will not affect the “voice” of the Board that is reflected in the BPM. If the opinion of the Board on a policy matter changes, it will change the BPM accordingly, but these adjustments to policies will be based more on changes in the situation than on changes in the make-up of the Board.

Q14: We have always relied on our committees to be a communications bridge from the members to the GM and the staff. It seems like the new Model reduces the role of the committees to a strictly advisory status. How can we be sure that the committees will not lose their influence under this new scheme?

A14: Even though committees play an important role in clubs, it is still an advisory role and not within the chain of authority. That said, any GM or staff person who is not heavily influenced by the input from the various committees will probably not last long in the job. Committees provide invaluable input from the members as customers and they provide necessary volunteer labor in the planning and implementation of club activities and special events. The Club Governance Model is not intended to weaken the committees’ influence in any way – only to put it in context. It situates the Board Committees as speaking to the Board and not for the Board. The Board Committees are extensions of the Board. They inform the Board on Board policy and they serve the General Manager as volunteers in an advisory role.

Q15: There may be ultimate value in the new Model, but it seems like a lot of work, time, and money. We are not a rich club and we have more pressing issues than documenting our policies. Why should we ask the Board to take time and effort away from the obvious problems in order to address something of such intangible value.

A15: This may be the most frequent response from a Board that is considering the new Model. There is work involved in developing a BPM and most club Board members have a limited amount of time to do even the basic necessities of their job. Taking on the major investment of writing a manual that is perceived as having dubious value is not high on the list of most club Boards. There are officers to elect and budgets to pass and members to admit and other critical tasks that should not be sacrificed just so that the Board can say that it has a policy manual. Board members may concede that there are benefits to the BPM, but they feel that they don’t have the dollars or the hours to support the effort of developing one.

It’s true that developing a BPM is not a trivial exercise and we do not want to suggest otherwise. The real question, however, is not whether developing a BPM takes work, but whether it takes “too much work,” i.e., its costs exceed its benefits. For that particular test, we ask that Presidents and Boards look to a horizon more distant than the end of their terms, because a true measure of the BPM’s value is over time. While the start-up costs are typically incurred in the short-term, i.e., the first year or two of implementation, the benefits accrue as long as the Model is in place. We realize that many Presidents and Board members have more tangible measures of success for their tenure – a manicured golf course, renovated facilities, better food in the dining room, etc. – and that a better way to govern is rarely in their top ten success measures. But equipping the Board to serve the members more efficiently will produce more durable returns over the long run than any of these more obvious accomplishments.

One more point on how to assess the “cost” of implementing the BPM. The objective of documenting policy in the BPM is not to avoid the cost in time of discussing different points of view and resolving them with compromise language. On the contrary, there is a sense in which the longer it takes to resolve differences, the greater the need for the policy to be documented. With some Boards, there seems to be an attitude that time is saved if controversial topics are deferred or left unaddressed altogether. But leaving fundamental issues unresolved only increases the time that will be needed to discuss and resolve associated issues. Avoiding the tough issues also does a poor job of modeling basic values like integrity, respect, and transparency. Good Boards take on issues where there are differences among its Board members and then they document the consensus in the BPM. They incur the “cost” of working out the differences, but they incur them only once. And they recoup those costs when they build on that agreed-upon language in the policy – and their successor Board members recoup those same costs many times over in the form of benefits of a living, breathing governance management system – the BPM.

Q16: There appears to be areas where the Club Governance Model conflicts with our bylaws and amending the bylaws requires a vote of the membership, an exercise that takes time and energy. Is amending the bylaws always necessary in order to implement the new model?

A16: The short answer to your question is “no, it is not always necessary to change the bylaws in order to implement the Club Governance Model.” However, it is not uncommon for the bylaws to include provisions that conflict with the model. For example, the bylaws may designate the President as the CEO and they may list the committees that must be formed and maintained. Because amending the bylaws can be a time-consuming process, we recommend that the Board develop the BPM as if bylaw changes had been effected, i.e., as if there was no conflict. This will allow the Board to develop the BPM on the merits and circle back to the bylaws to identify where the bylaws need to be changed in order to make them compatible with the BPM. Doing this will help convince the members that the Board has addressed the substance of what the bylaws require, but that they are simply making it Board policy rather than member policy.

Demonstrating to the members how the Board intends to manage itself and monitor club performance is a good way to communicate confidence in the new governance system. For example, if the members see virtually the same committees listed in the BPM that are in the bylaws, they will be more receptive to changing the bylaws. In a similar manner, if the members see how the Board is led and how it monitors the General Manager, they will be less concerned about taking the CEO label off the position of President.

Q17: I understand that CMAA has announced a new designation for club managers called the Certified Chief Executive. Shouldn’t we delay promoting our General Manager to CEO until she has attained this level of recognition?

A17: The Certified Chief Executive (CCE) designation is another example of CMAA encouraging its members to think of themselves as executives who are running businesses of significant size and complexity. And someone with the CCE label will certainly be a prime candidate for a club’s CEO. However, an essential key feature of the Club Governance Model is the clarity of the relationship between the Board and the GM, whether the GM is CEO, COO, or simply the club manager. The key is how the Board delegates its authority. For example, say the Board of Club A designates the GM who is a CCE as the CEO, but continues to operate through implicit (unwritten) policies in a haphazard way. Say Club B has adopted the Club Governance Model with its clear delegation of authority in the BPM, but has chosen not to give the GM the CEO title. Of the two examples, the preferred approach is Club B’s, notwithstanding its reluctance to designated its General Manager as the CEO.

Q18: Our board seeks to bring our leadership and governance functions into the 21st Century, but we only have so much time to devote to planning. Which should be the higher priority – developing a strategic plan or adopting a new governance structure like the Club Governance Model?

A18: One of the biggest challenges to club leadership and governance is the lack of continuity that results from the frequent changes in the board of directors and its leaders. Each year over 75% of clubs elect a new President and most clubs also replace as much as a third of their board membership. Maintaining a “long line” or consistency in the planning function requires an extra measure of commitment and competence at the Board level. The two most effective ways to meet this challenge to stay consistent are (1) an effective strategic planning process and (2) an effective governance model comprising sound governance principles. But of these two important board functions, which should take priority?

Most clubs who are deciding whether to invest in a strategic plan or remodel its governance structure will choose to develop a strategic plan. Why? Because it’s the more familiar activity and the output is more easily envisioned. A new governance model is often seen as somewhat abstract and legal and club leaders may doubt its real value. A new governance model may even threaten leaders who like the way things are.

But there are good reasons to consider adopting a new governance model before launching into a lengthy strategic planning exercise. Having a good governance structure in place before developing a strategic plan can be likened to having a good football team in place before deciding on its offensive and defensive alignments or the opponents that it will play.

Adopting a new governance structure normally takes less time than developing a strategic plan, which can easily take over a year and therefore can overlap one or more board elections. If a board has adopted the Club Governance Model (Model), it will be equipped to engage in the planning process. It will have clearly documented roles for the Board, the General Manager, and the staff – roles that will not change with the appointment of a new President or the election of a new slate of Board members. Because the unit of authority in the Model is the full Board and not the President, the Board can engage in a strategic planning process without fear of the plan being discounted by a new President or a new group of Board members. Even a Board that replaces a third of its number every year will have two thirds of the Board intact.

Finally, test the question’s premise that a Board has time for only one of these two critical functions. Because planning and governing are interdependent, the best answer to the question may be to develop a strategic plan and revise the governance model in parallel. It will take less time overall and in the end, by coordinating these two functions in the same exercise, the board will see how one informs the other.