The US Internal Revenue Service (IRS) recognized
92,331 trade and professional associations in 2010, a 3.4 percent
increase since 2001.1 Here, experienced consultant Bill Charney, who has
helped a wide variety of associations implement governance
improvements—often using the Policy Governance® system—highlights some
of the particular challenges they face.
“Governance Is Governance”
Dayton, a preeminent philanthropist and former chairman and CEO of
Dayton Hudson Corporation (now Target Corporation), gave his now-famous
“Governance Is Governance” speech to the 1986 Independent Sector
leadership forum (published in 1987).2 Dayton’s message to nonprofit
leaders confounded the notions, common then and now, that we still refer
to as “traditional” board practices.
Conveying his “deeply held conviction” that
governance is not management, Dayton stated that chair and CEO roles
must be separated, that an all-powerful chair or a weak CEO is a threat
to organizational success, and that the governance job is identical in
both the nonprofit and for-profit sectors. The only distinction, he
noted, is that nonprofit “trustees” also should volunteer in service to,
not exercising authority over, the CEO.
These notions added great credence to John Carver’s Policy Governance model. For critics grumbling that a singular
model cannot attend to an organization’s uniqueness, Dayton articulated
brilliantly how failing to recognize that “governance is governance” is
itself detrimental to success and sustainability.
Is Association Governance
“Associations” are formed when people join together
to advance common interests, be they business or social. This article
focuses particularly on trade and business associations, in which
members may be individuals, organizations, or both. Many of the dynamics
addressed are also common in other membership organizations (e.g.,
clubs, guilds, fraternities/sororities, homeowner associations).
The job of an association board is no different than
that of a charity or an equity corporation: to define and ensure the
achievement of Ends reflecting owners’ needs/interests, and to ensure
that the organization conducts itself appropriately in producing these
Different industry sectors often exhibit common
patterns or nuances that may foster or impede successful governance.
Challenges pronounced in association boardrooms are not exclusive to the
sector but occur with sufficient frequency to merit exploration as to
cause and effect. These include:
Challenge 1: The “We Are an Association, Not a Business!” Conundrum
associations that resist adaptation of management and governance best
practices, this refrain is often cited as a reason “not to change.” Yet
as associations are entities in which people invest certain resources
and expect return on that investment, associations are businesses.
to “acting like a business” is primarily typical to long-standing
volunteer-driven associations, in which paid employees historically
worked in administrative roles at the behest of volunteer leaders with
little or no relevant business experience.
board members today have a better general understanding of their
fiduciary duties, the sentiment behind the refrain remains surprisingly
prevalent in associations, with sound business practices often
overshadowed by organizational tradition.
Challenge 2: Owner
Representation and Board Size
identification, understanding, and linking with the “ownership” is
challenging in many nonprofit sectors, it is less so for most
associations. Typically elected by the membership, association boards
recognize, at least conceptually, the membership as the primary
“ownership” on whose behalf they serve.
however, board structures and size often obscure this otherwise simple
matter. Among nonprofits, the larger the board, the more likely it
belongs to an association! Board Leadership
and other publications have featured numerous articles about board size
(most recommending between seven and twelve as the “sweet spot”). In
associations, board sizes expand with good intentions that range from
securing “representation” for affiliate, chapter, and special interest
groups, to offering more leadership opportunities without “pushing out”
colleagues via term limits, or even “to ensure we have enough board
members to staff committees.”
That board members
appointed or elected to represent specific membership segments perceive
their role as advocating and voting for that segment is understandable,
but it contradicts and blurs their fiduciary duty of loyalty to the
interests of all members. Instead of the owner-representative hat (“what
will best serve our collective, long-term needs?”), constituency-based
board members tend to wear that of customers (“what do I, or those just
like me, want?”).
In Race for Relevance,3
Coerver and Byers compellingly suggest how a five-member governing
board can serve an association membership far better than the larger,
more cumbersome structures that are prevalent. Their rationale is
substantive, ranging from the basic: “Large boards are cumbersome … slow
…” to the consequential: “The larger a board gets, the less engaged the
individual director tends to be.” They note that as boards get large
(the teens and beyond), true governing authority typically becomes
vested in a group of approximately five people: the executive committee.
Thus, they propose the efficiency and authenticity (no charades) of a
The “linkage” component of the
board’s job is to take into account the needs and interests of the
ownership. Smaller boards can do so quite effectively, as representation
is characterized by the diversity of interests genuinely sought and
considered by a board, not how many board members are voting.
Challenge 3: Volunteer Engagement on Committees
engagement is vital to vibrant associations, which are venues for
members to learn from and support the growth and success of peers. In
many instances, boards appropriately expect their association executives
to actively engage and recognize member voluntarism.
with authority over volunteer committees don’t find this a problem, but
the “governance creep” challenge arises when boards make staff support
of committee activities a higher priority than efficiently serving the
membership as a whole. Another problem is that association boards often
“impose” committee structures mirroring management positions, with
oversight/approval authority over key staff functions (e.g., membership,
education, human resources/personnel, finance, facilities, government
When management must take direction and/or
seek approvals from subsets of the board, one-voice leadership and
accountability for performance are nullified, taking a back seat to
“ensuring that x, y, and z were part of the decision.”
committees are a prime example. As conferences/education are vital
programs for most associations, a time-honored tradition for many is to
assign members to a committee that will design the program and pick
speakers. If the president or board appoints the group, and the
educational programs are hugely successful, all is well.
however, there are conflicts in planning, or disappointments in
outcomes, authority gets muddied. “Group-think” often emerges, and
rather than criteria-based decisions (e.g., past speaker ratings, new
programming needs), they become based on “who knows whom?” While
accountability for performance evaporates, blame does not! Even when a
board explicitly delegates authority over the education program to a
committee rather than to the CEO, a weak program bodes poorly for the
CEO and his/her job security.
Kenneth Dayton wondered, in Governance Is Governance:
”Why is it that so many corporate directors grow horns when they become
trustees?”… doing things “they would never think of doing as
[corporate] directors, interfering with management’s role and making
decisions or requests that no corporate director would think of making?”
solution, as Policy Governance boards identify, is simpler governance
structures, replacing most “standing committees” with more ad-hoc,
short-term efforts convened to do governance rather than management
To the extent collegiality and networking are
held out as reasons for large boards and committee structures (whether
board or CEO led), these should be seen as a by-product of, not a higher
priority than, optimizing organizational performance.
Challenge 4: Board Chairs/Presidents Empowered as Pseudo-CEOs
many decades, association presidents were those who, after ascending
through a hierarchy of offices, substantially put their own
businesses/careers aside for a year, and served as volunteer CEO. Bylaws
often delegated “executive authority” to this position. The top-ranking
executive employee reported to the president, and the “Executive Vice
President” (EVP) title became common, more so in associations than any
Recognizing that a “president”
typically “runs the company,” shifting the top volunteer title from
“President” to “Board Chair” (or Chief Governance Officer) has been a
trend in the past ten to fifteen years, particularly for larger
associations, with “EVP” increasingly transitioning to “CEO” or
A title should reflect the role and
authority of its holder. Dayton’s message nearly thirty years ago still
resonates: “… the (full-time professional staff) executive is the CEO
of the institution. It matters not what the actual title is … these
professionals are the CEOs and they should consider themselves that, and
should be so viewed by the entire board. A position description should
clearly state that fact—and everyone on the board should accept that
fact, particularly the chair.”
Anytime a board
president or chair is empowered to treat the executive as his/her
subordinate, the organization is at risk of becoming the fiefdom of one
person with inadequate checks and balances.
Challenge 5: Officer Candidates “Running for Election”
When a membership elects both board members and candidates
“running for office,” new challenges arise. Significant disruption can
occur when an elected officer arrives with his or her “agenda.” In
associations, deference to these prerogatives is too often the norm,
regardless of whether they reflect current association needs or
contradict previously agreed-upon board initiatives.
associations have annual “installation” events, at which the new
president gets sworn in. It is common for the incoming president to be
given the authority to determine the “theme” of that year’s (often
expensive) installation party. The personal preferences can be extreme,
such as one Realtor® association at which the incoming president
literally directed the EVP to procure “a tiara and scepter” for her to
wear and hold at her installation. Sadly, it was no joke!
ceremonial value of these traditions can be very engaging and
beneficial. Boards might consider, however, if celebrating the
profession’s achievements and contributions to society would produce
greater membership engagement and benefit.
Challenge 6: Tradition Valued More than Progress
should honor their organization’s heritage, while facing the challenge
that yesterday’s solutions may not meet tomorrow’s needs. Governance is
the act of steering an organization to a desired future. While a
rearview mirror is integral to safe driving, it is for good reason that
the windshield is much larger!
Just as John Carver’s Boards That Make a Difference4 was groundbreaking for governance, Coerver and Byers’s books Road to Relevance5 and Race for Relevance
provide similar wake-up calls and proposed solutions for associations.
In the latter, they note six “marketplace realities” that have
irrevocably altered the landscape and threatened the relevance of
“Five radical changes” are proposed in Race for Relevance to meet these challenges. The latter four are:
From the lens of most sectors, these are sensible business strategies, but why are they “radical?”
The answer lies in context. The biggest challenges
for many associations are not external, but lie within the structures
that are hurdles to their own competitiveness. Cognizant that sound
governance creates an environment in which management can excel, Coerver
and Byers emphatically convey that the first step in the sequence of
change must be radical change #1: “Overhaul the Governance Model.”
3. Harrison Coerver and Mary Byers, Race for Relevance: 5 Radical Changes for Associations (Washington, DC: ASAE, 2011).
4. John Carver, Boards That Make a Difference: A New Design for Leadership in Nonprofit and Public Organizations, 3rd ed. (San Francisco, CA: Jossey-Bass, 2006).
5. Harrison Coerver and Mary Byers, Road to Relevance: 5 Strategies for Competitive Associations (Washington, DC: ASAE, 2013).
Bill Charney can be contacted at
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