January 2, 2020
Each year, the members of 3,300 member-owned private clubs elect roughly 10,000 new board members. The question is: Will they lead their clubs into the future, or merely preside over the status quo for another year?
The trends in the club industry are well known: Club participation rates are declining (2018 total golf rounds across the U.S. are down 4.8 percent year-over-year), golf appeals to a narrowing audience, and alternatives abound to claim our shrinking leisure time.
Boards governing member-owned clubs elect a few new nominees each year, in hopes of refreshing the club’s vision and attracting a new generation of club members. However, most boards resist change and reluctantly kick the can to the next board.
Why is this? Why does the club industry adapt more slowly than other industries? For one, the nomination process often seems to lock in the mindset of the last decade. Older club members with stature gain board roles and then nominate their friends of the same age. Kurt Kuebler, (KOPPLIN KUEBLER & WALLACE) suggests that the nominating committee is the committee with the most power and influence at the club. Therefore, you see men still dominating club boards even though women represent nearly one quarter of all golfers, according to the National Golf Foundation.
Women also make most family purchasing decisions. This also explains why capital dollars often flow disproportionately to golf course projects over clubhouse upgrades or new amenities. Inertia is structurally built in.
Another factor is lack of accountability. Most companies react quickly to a changing competitive environment – if they don’t, the stock price falls and management (and the board) gets fired.
Clubs were founded as a respite from this and most are still organized as cooperatives. Boards do not get fired; they just rotate. Staff is not accountable when the board has no club management expertise and only meets for a few hours per month. Thanks in large part to the industry consulting firm, Club Benchmarking, data is starting to become more prevalent, but club software and reporting notoriously lags other hospitality sectors.
Lastly, human nature plays its role. How many of us take a controversial position when welcomed into a new group? What board member wants to push through a tough vote on a new fitness center and threaten some friendships in the process?
Most club members feel grateful to be nominated to the club’s board and simply want to fit in – not rock the boat.
We recently spent time with a top-ranked club in Northern California where the long-time president used his political capital to push through a $5 million new member grill with only a few votes to spare. He took personal heat over championing the project.
Many questioned his design choices and criticized the use of club dollars. Strain was placed on many of his friendships at the club, but he gained the respect and admiration of the entire membership after the benefits were apparent.
Today, the club is thriving and attracting younger families, partly because of the refreshed member spaces. He feels vindicated by his leadership, but he admits that egos were bruised and friendships were tested in the process.
What is the point of volunteering for board service, if not to move the club into the future? The National Club Association’s, Club Governance Standards, indicates that only 38 percent of clubs include strategic planning items on each board meeting agenda.
The promise of club bylaws lies in constantly bringing in new blood to make the changes necessary to keep the club relevant for the long term. If new board members simply perpetuate the status quo, the club will soon fall behind nearby clubs with modernizing leaders.
An aging membership and board that fails to imagine and fund a forward-looking club vision will lose members and lose relevance in its local club market. So, welcome to club leadership and governance. How will you lead? Having been in the boardroom of dozens of member-owned clubs in 2018, I can attest that leaders who are willing to push the envelope, are leading their clubs to new heights.