Editor's note: This is the second of a three-part series on how clubs can improve the membership experience.
KEY INSIGHTS
- Strategic planning is inconsistently applied, yet crucial to board effectiveness, as clubs with a plan exhibit stronger governance practices.
- Board-to-member communication continues to be challenging, but emphasizing education, transparency, and direct communication is associated with increased effectiveness.
- Risk management practices in clubs are currently underdeveloped, leaving them vulnerable to unexpected changes or external disruptions.
IMPROVING CLUB GOVERNANCE
With many clubs continuing to adopt best practices, private club governance is seeing an overall enhancement in club leadership and operational effectiveness. However, opportunities for improvement remain within the key areas of board responsibility. Specifically, clubs can improve governance by increasing the use of strategic planning to enable a shift from procedural oversight to a more proactive, strategy-driven approach. Increasing the focus on risk management is another opportunity for clubs of all sizes. Finally, as one of the most common challenges in private clubs [1] , board-to-member communication is an area where dedicated efforts can be made to ensure effective and transparent engagement.
What actions can clubs take to increase governance effectiveness in these three areas? Results from the Club Leaders’ Perspectives (CLP) research, conducted in collaboration with the Club Management Association of America (CMAA), examine these to provide insights and actionable steps that all clubs can implement.
RELATED: Part 1: Maximizing club value | Read
BOARD OVERSIGHT OPPORTUNITIES
For clubs to thrive, managers focus on daily operations while board members prioritize long-term strategic considerations and enhancing board effectiveness. Our research, which assessed the implementation of 18 governance best practices at private clubs, reveals that the respondents’ most commonly followed best practices are aligned with establishing core governance parameters, such as having the number and type of board committees defined (89%) and clearly defining and documenting roles for board functions and board members (75%) (Figure 1).
Figure 1. Board Oversight Best Practice Activities
Note: Respondents were asked to select which board oversight best practices are used at their club. The % represents the number of respondents who indicated usage of each corresponding best practice.
Enhancement Opportunities. While policies lay the groundwork for success, having an active strategic plan is vital for assessing progress toward the club’s vision and objectives. Results indicate that one-third of respondents do not have a strategic plan, and 40% of total respondents do not routinely update theirs. For clubs that are missing these key elements, focusing on initiatives to implement the strategic plan can improve board effectiveness.
These findings, and the fact that 42% of respondents do not refer to a strategic plan when making decisions, highlight the opportunities for improvement at many clubs. Additionally, having a board orientation program to help new board members integrate and contribute to strategic discussions is one of the least followed best practices (58%). Strengthening these areas enables clubs to transition from procedural oversight to a more proactive and strategy-driven approach.
RISK MANAGEMENT OPPORTUNITIES
Strategic planning is associated with more effective board oversight, with an 18% increase in documented delegation of authority to the GM/COO and an 18% boost in risk management planning when a plan is in place, as results in Figure 2 demonstrate. Effective risk management can significantly impact board oversight, especially with current uncertainties and potential economic changes. It's a guiding principle that can easily be overlooked until it's too late, especially when operating without a plan. Questions such as “What potentially threatens the achievement of our strategic priorities?” and “What risks are we facing as an organization?” are starting points for risk management planning.
Figure 2. Influence of Strategic Plan on Risk Management Best Practice
| Top Oversight Best Practices Followed | % Usage (No Plan) | % Usage (Plan) | Strategic Plan Impact 1 |
Club’s legal compliance reported to the board? | 80% | 94% | +14% |
| Documented delegation of authority for the GM/COO? | 75% | 93% | +18% |
| Least Followed Oversight Best Practices | |||
| Club has a risk management plan/framework in place? | 48% | 66% | +18% |
| Succession plan in place for senior management (i.e., GM/COO)? | 31% | 48% | +17% |
1 Respondents were asked to select which governance oversight activities are currently used at their club. The differences in risk management best practices adoption were determined by comparing usage among clubs with a strategic plan versus those without.
Enhancing Risk Management. Despite clubs without a strategic plan successfully reporting compliance with laws and regulations to the board (80%) and clearly defining the authority of the GM/COO (75%), meaningful opportunities exist to enhance risk management practices. A concern emerging from our research is that only 48% of respondents reported having a risk management plan, and just 31% have a succession plan for senior management. These plans help guard against risks threatening the achievement of priorities, such as the GM/COO’s abrupt departure.
Surprisingly, many clubs still lack a board policy manual (35%), an essential component of good governance and effective risk management. Strengthening these areas prepares clubs for navigating uncertainties while maintaining strategic direction and operational continuity.
ENHANCING MEMBER COMMUNICATION
According to our research, data indicates that outward board communication is a significant governance challenge. Only 46% of clubs rate current communication as adequate, while 18% report it as ineffective.
But how can clubs address these concerns to foster clarity, engagement, and alignment between the board and the members they serve? Figure 3 offers insights into the methods that clubs most commonly employ and the communication techniques that can be effectively replicated across the industry.
Figure 3. Aligning Techniques with Successful Communication
Note: Respondents were asked to select tactics they use to share information with their members. These results were then compared to overall board communication effectiveness to identify the effectiveness tiers.
Results indicate that clubs prioritizing education and transparency by offering regular governance education sessions and publishing clear, detailed updates on board and committee activities are experiencing higher levels of communication effectiveness. Enhancing direct member engagement by assigning a board liaison, hosting informal networking events, and facilitating town hall meetings fosters meaningful dialogue and helps build open lines of communication.
[1] Club Members’ Perspectives: Insights into the Changing Needs and Wants of Private Club Members (West Palm Beach, FL: GGA Partners), 2024.
Visit GGAPartners.com to discover more about how active communication can support effective strategy, explore insights from the Club Leaders’ Perspectives research, and learn how GGA Partners can support your club’s long-term success and sustainability.
Note: GGA Partners and Buffalo Groupe are divisions of ClubWorks. Buffalo Groupe publishes The First Call.