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Best Practices for Nomination & Succession Planning

Posted by Joe Abely on 9/27/24 3:42 PM

Nomination and succession planning

10 Key Takeaways from the 2024 Club Governance Survey

In early June, we released the initial findings from our 2024 Club Governance Survey. That research was focused on understanding how clubs manage and build their volunteer leadership teams. Nearly 1,000 respondents from 528 clubs shared insights on the nominating and succession process in private clubs. The survey specifically targeted board members, nominating committee members and top executives (GM or GM/COO).

Through continued analysis of data from that survey, patterns have emerged indicative of common challenges and significant opportunities for improvement of governance structures and processes in the club industry.

Opportunities:

  1. Most survey respondents reported that the nominating process at their club only focused on the current cycle. Observation of effective boards both in and outside of the club industry suggests that in healthy organizations, the nominating committee functions as a leadership development committee, investing significant thought and effort into continuous identification and development of future leaders.
  2. Only 22% of respondents reported having a formal succession planning process for board members and officers. Outside the club industry, succession planning is used to ensure business continuity, smooth leadership transitions and reliable transfer of institutional knowledge. It also allows organizations sufficient time to identify and develop future leaders.
  3. Many respondents reported a lack of uniformity in the nominating process for officers, with some indicating that there is no formal process in place at their club. Ideally, officer nominations would be conducted by either the nominating committee or a separate nominating committee of the board and that process would be clearly communicated to all stakeholders.
  4. Only 52% of respondents reported that their club has a charter for the nominating committee. In addition to what is required in the club’s bylaws, charters should detail the tasks and duties of the committee including the process for soliciting, vetting and nominating candidates, as well as outline the qualifications and criteria for candidates to be considered for nomination.
  5. Without term limits for the nominating committee, clubs risk stagnation and undue concentration of influence, yet only 54% of respondents reported that their nominating committees have term limits. Term limits can help bring fresh perspectives, mitigate politics and enable better succession planning as newer members ensure that the volunteer leadership team accurately reflects the membership.
  6. Communication, or a lack thereof, was another common theme in the survey responses. Communicating transparently about the process for the nomination and election of board members and officers can build understanding and trust among members and pique their interest in getting involved in club leadership.
  7. Unless otherwise provided for in the club’s bylaws (including nomination by petition) or state law, self-nomination for board seats can be problematic. A formal nominating process avoids popularity contests and supports consistent implementation of long-term plans.
  8. Nominating Committees generally operate independently, but they should solicit input from a variety of constituencies including current board members, committee chairs, and management when looking for potential board candidates. Obtaining different perspectives from others helps identify the best candidates.
  9. Active committee participation as prerequisite for board nomination provides a practical demonstration of a candidate’s dedication, skills, and suitability for a board position and ensures new board members begin their term with some insight into club operations.
  10. Board and committee chairs actively recruiting members to join committees can broaden participation and proactively target skill sets and interests consistent with committee needs as opposed to relying on volunteers and/or appointments by committee chairs and/or the president.

Outcomes:

We cross-referenced the responses of clubs employing the practices noted above with their responses to other questions in the survey and found the following common characteristics:

  • The clubs reported having a stable governance culture. They are consistently investing in amenities and facilities and the members are mostly happy. There are some naysayers, but overall, there is a shared sense of where the club is heading in the future, and comprehensive support for that vision. Transitions of board members and officers are smooth and don’t generate much drama.

  • The club has a highly functional nominating process. Club culture and volunteer leadership are conducive to a healthy club, consistently investing and evolving with the support of a mostly happy and aligned membership.

  • The club’s nomination and election process for board members and officers is effective.

  • The clubs have experienced a lower incidence of contentious contested elections.

  • Respondents described their club's process for nomination of board members and officers as being less political.

  • For responding clubs that implement these positive practices where we also had financial information, we see that most experienced better financial results, particularly higher net worth, lower debt leverage, and higher ratios of net-to-gross fixed assets (an indication of a fresher campus) than clubs who did not.

  • With respect to the composition of the nominating committee as well as how individuals are appointed, practices ranged widely. From the survey, five members (43%) was the most common number of people on the nominating committee. For clubs with term limits, a three-year limit appeared to produce the most favorable results. This would allow for one new member every three years, which improves continuity and brings fresh perspectives to the committee.

  • While 35% of respondents report that there are no board members on their club’s nominating committee, having at least one can bring institutional knowledge concerning the club’s operations and strategic goals to the process. Board members may also possess knowledge of potential candidates that might fit from working with committees. It was interesting to see that, except for positions stipulated in bylaws, having nominating committee members appointed by the board produced better outcomes.

**Please note that instituting some of these practices may require modification of current bylaws.

To discuss the 2024 Governance Survey or your club’s nomination and succession process, please contact Joe Abely at jabely@clubbenchmarking.com or 781-953-9333.

Topics: Articles, Club Governance

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