I must admit, when I was a club manager I viewed the topic of corporate governance as something of a compliance checklist item. I knew that Board Members had to engage in governance training and I knew that the constitution was a document that told us how we elected Directors and disciplined members but I never really saw governance as a source of competitive advantage.
In the six months since I joined DWS, I’ve worked with some clubs who’ve had the foresight to pursue the idea of best practice governance with a view to it adding real value to their business.
We tell ourselves repeatedly that our people are our greatest source of competitive advantage. We invest in their training and development, we look to reward and recognise great performance and we go to great lengths to address issues of morale and culture within the team. At least, we do with our staff.
But what about the key people in our clubs who make all the big decisions?
This group, the Board or Management Committee, set policy direction, approve major capital expenditure and are responsible for determining the strategic direction of the club. Yet, in many cases, we pay lip service only to their development.
It makes intuitive sense that we should invest time and effort in Board Member development, doesn’t it?
Good management will only overcome poor governance in the immediate short term. A good manager will drive the greatest revenue and maximise earnings from the current facilities mix this year and probably next, but if the Board doesn’t invest in the right projects and facility improvements, there’s only so much the manager can do in the longer term.
Best practice governance, coupled with strong management, is the roadmap to certain success.
Factors for best practice governance:
- The club’s constitution should be reviewed regularly to ensure currency and relevance, don’t wait for an issue to arise before considering a constitution review.
- Clubs must have a strategic plan – this sets the vision and is the mandate that the Board hands down to management regarding how to run the club.
- Directors should receive regular training as to their roles to develop their skills as a Director (e.g. understanding and interpreting club financial information).
- The best Boards will have a mechanism for dispute resolution to avoid dysfunction creeping in on the back of differing viewpoints.
- And a Board should have a code of conduct which outlines the expected values and behaviours to be demonstrated.