Shaking Up the Boardroom

By | January 4th, 2018

As the Chief Operating Officer concept continues to gain favor, private clubs are taking renewed looks at all aspects of their governance, including who should get seats at the table and just what their roles should be.

First of a Four-Part Series

In a memorandum distributed by a General Manager to the Board members of an old-line, traditional Midwestern club that raised the issue of needing to consider a relaxation of that club’s dress code, the GM appealed for exploration of a change—and avoidance of merely following other clubs’ examples—by stating: “It is important that we shy away from adopting the policies of other clubs and focus on ourselves, developing policies that speak directly to our club’s culture and demographics.”

The GM then concluded his message by reminding its recipients that “Latin became a dead language, because its structure did not accommodate for change.”


• Who should populate club Boards, and what Board members should—and shouldn’t—be concerned with, continues to be reexamined.

• Traditional approaches to Board meetings are being reassessed, with greater consideration being given to reduced frequency and virtual options.

• Tours of club facilities, field trips to other clubs and retreats or other interactive and more casual forms of connections between Board and club staff members are being seen as more powerful ways to stimulate a meaningful understanding of issues and spur needed change.

Such emboldened approaches from club managers to their Boards used to be largely unthinkable. But they have become more commonplace, as changing times have forced even the most established private clubs to recognize the need to embrace a new era, if they are to be able to maintain their long-held standings.

This new period has brought not only a wave of more diverse memberships, made up of people with much different expectations of what they want to gain from a club experience, but also a new breed of club managers who have been empowered and charged with being much more direct and forceful in trying to bring about the change needed to meet those expectations. And as the third leg of the modernized stool, club Boards themselves are also being reexamined in every aspect—from who should now populate them to what they should, and shouldn’t, be concerned with.

New Ways of Operating
A recent “Pulse Survey” conducted by the McMahon Group among 400 club managers found that 84% of the respondents’ clubs have now established the General Manager/Chief Operating Officer model as “the most popular management structure” among clubs. Certainly, it still isn’t difficult to find examples of clubs where the top manager may have the COO title, but not the degree of autonomy and overriding decision-making power that should go with it. But there’s also ample evidence, in the form of tangible and noticeable change at some of the industry’s most tradition-bound properties, that the COO trend keeps gaining real traction, and only stands to continue to take firmer hold.

And as it does, the makeup and defined roles of private-club Boards are also undergoing a noticeable transformation. Especially as clubs continue to pursue major facility upgrades and expansions that reflect significant new strategic directions, many are also seeing the need to revisit key issues like the length of officers’ terms, the number of required committees, and how changes in club policy need to be fashioned and implemented.

Resetting the Scales

The major changes seen in the nature of private clubs’ membership and operations over the past 10-plus years—not to mention the jarring wakeup call brought on by the recession at the end of the last decade—have caused many member-owned clubs to undertake significant reassessments of how they are structured and governed.

Through a series presented throughout 2018, C&RB will look at how and why many clubs have recently been moved to drastically revamp traditional governance structures that were used for decades, because of the need to have a more flexible and agile operational and strategic profile.

Future installments of the series will include explorations of the latest trends and approaches in club governance, including: by-laws and voting rules and procedures; tax structures; Board and committee structures; the emergence of the “Chief Operating Officer” role, and other fundamental changes taking place in how clubs are organized and managed, both for their daily activities and long-range strategic direction.

At the same time, more clubs are learning to function with a leaner core of longer-term Board leadership, even if they’re not in the midst of a major project or recovering from a crisis. The drumbeat for finding ways to allow effective Board Presidents to continue to serve beyond one year, and perhaps even for undefined, as-needed periods, continues to grow louder. As a related trend, the backlash against continuing to fill Board seats with new bodies every year, only because by-laws require such turnover, has also gained strength, especially as it becomes more difficult to recruit willing and able participants.

Two-Way Street
Beyond taking measures to help get, and keep, a more sustained and manageable number of effective and dedicated participants involved with club governance, the obligations of the COO (whether in title and/or function) and his or her staff are also changing, in terms of how a club’s management team should now strive to inform, and interact with, its Board.

More clubs are reassessing how often Boards should meet, whether those meetings always need to be on site or even in person (e.g., exploring the benefits of going virtual), and how agendas should be structured and controlled. A renewed emphasis is also being put on sharpening managers’ presentation skills, particularly for department heads like Superintendents and Executive Chefs who have not traditionally been part of the Board communication process, so that they can convey needed information from their operating areas more effectively.

Tours of club facilities, field trips to other clubs, and retreats or other interactive and more casual forms of connection between Board and staff members are also gaining favor, as more powerful ways to stimulate a more meaningful understanding of key issues and to spur needed change, while also engendering mutual feelings of respect and a sharing of common goals and objectives.

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