Sunday, October 30, 2016

6 Things that Go Boo in the Night for Association Execs


Okay, it’s Halloween and time to think about scary topics.

Here are six things that can spook association executives.
  1. A key employs embezzles association funds.  Always my biggest fear ... both as an association exec and as an AMC owner. And, despite warnings, we’re seeing far too much embezzlement in associations and nonprofits. We saw another case “pop up” here in Southwest Florida. What are boards thinking? Too many boards don’t seem to care about policies or procedures. Trust but verify! When I owned an AMC, I contracted with a certified fraud examiner to establish financial systems (yes, checks and balances) to reassure myself and our clients that their funds were safe and well managed?
  2. A volunteer president dies in office.   It happens. At one association I managed, one of our executive committee members died unexpectedly. Another’s president died soon after being elected. Do you think ahead and build contingency plans? Do you include this in a crisis communications plan? How do you inform your boards? Your staff? Plan ahead now and hope you never need it!
  3. A competing association starts in your space.   It has happened in several professions/industries. It could be organized as a for-profit company! It often begins when a company starts a conference or trade show that leads to an organization. It could start from a website or blog. An example is the Veterinary Information Network which calls itself “the oldest and largest online medical information service devoted to veterinary medicine.” Well, what happened to the American Veterinary Medicine Association and its role? It could happen to you so be prepared, scan your environment so you are not surprised.
  4. You get hacked or a natural disaster hits.    In the “good old days,” we only needed to worry about a power surge knocking out the phone system and computer network. Now, hacking data is prevalent. Are you prepared with backup systems if you get hacked? What if the hacker gets personal data of your members? Or, instead of hacking, perhaps a tornado, hurricane, earthquake or zika virus (or other epidemic) hits an area where you are scheduled to hold your big annual conference? Are you prepared? Do you have proper insurance conference? Does your crisis communications plan include contacting your attendees and/or members?
  5. A key employ leaves with minimal notice or death.  My chief financial officer gave us two weeks notice. Shock waves. Losing a key position. An AMC owner once shared that a key executive died in an accident on the way to an association meeting. Tragic. Do you have contingency plans? I used to keep a resume file for staff prospects. I networked a lot to develop a talent pool to draw on. In the case of the CFO, I reached out to our outside CPAs and attorneys to seek candidates and to help “vet” prospects. What are you doing?
  6. Your biggest member resigns.   This applies mostly to trade associations where companies – not individuals – belong to the association. Almost all trade associations are composed of a diverse membership. I’ve seen somewhere the “big guys” say the association is run by the “little guys” and vice versa! Sometimes, one of the larger members doesn’t like the policy direction the organization has taken and threatens to cancel its membership (which might be 20% to 25% of the total revenue). My AMC managed a trade association where two of its members convinced the board to dissolve the association and become a “council” of a much larger (and more expensive association. Since that move, several of the members have resigned from the new council and are talking about re-forming the former association. Association execs need to be prepared. You need to recognize that “all members are equal but some are likely to be more equal than others!”
Hopefully, you will never face any of these spooky situations. But, hope doesn’t always work. Prior thought does. Contingency planning does. Being prepared does. If you’ve done all that, you should sleep better and not have to worry about things that go boo in the night!

Tuesday, August 30, 2016

Retiring Soon? When do you tell your association board?



If retirement is on your horizon, when do you inform your association’s board of directors.

Since Boomers represent a vast number of association CEOs, this is a major issue facing associations and nonprofits.

I've been on all sides of this issue:  as a volunteer when a CEO left; as a CEO who left; as a retiring Association Management Company (AMC) owner and most recently as a search consultant who helped a small, national association find a new executive team.

Recently, an association CEO raised the timing and transition question on ASAE’s Collaborate.  She began by telling us that she notified her board that she would be retiring in June 2019.  Thus a three-year notice.

What do you think?  Are you nearing retirement?  When do you plan to inform your board and staff?

Here are 5 suggestions for anyone looking at "giving notice" to retire:

Sunday, August 7, 2016

Recognition Drives Stronger Member Relationships



At one association where I worked, we “hung” photos of all the past presidents on a hallway wall.

No big deal, right?

Well, perhaps this recognition of service was more meaningful than I realized.

While at Ohio State, I had the opportunity to be part of the initial varsity ice hockey team. While I was a marginal player, I played every game for three years. Then, upon leaving Columbus, I disappeared and only occasionally had contact with the hockey program and former players; mainly at the 25th and 50th reunions.

Then, a Facebook post last week gave me a thrill that few get.

Ohio State created a “tradition wall” in the hockey locker room. They put a “brick” for every person that ever played hockey at Ohio State. And, there, on the bottom row, was my brick – with my name on it. There among all the other OSU players. Wow! (You can see it in the photo above ... just about the “N” in Tradition.

This tradition created a latent, awesome feeling that I didn’t know was in me.

And, now, I realize how important it is for associations to recognize their members (and donors). A plaque. A brick in the sidewalk. A photo on the wall. Perhaps a “symbolic brick” on your association’s website?
It doesn’t cost you much but the rewards to you are priceless!

Tuesday, July 26, 2016

Are hidden fees costing your members?

A Wall Street Journal story (7/23/16) about hidden fees inflating home prices got me to thinking about the hidden fees in the cost members pay to participate in your event.

In many cases, cities and other government entities create these “add-on” fees/taxes to pay for “desired extras” (such as a new stadium) with the governmental body telling its citizens that “this won’t cost you anything; we’ll just charge our visitors.”

Here’s what your members are paying when they come to your convention:

Flights

  • If you have flown recently, you know the hidden fees (fuel surcharges, TSA fees, etc) and “extra” fees (baggage fees, food, etc.) that scale up your costs. 
Rental cars
  • Four “add-on fees” showing on a May 2016 rental car receipt totaled $58.71 which was 24.8% of the total bill. They included a “concession charge,” a “garage recoupment fee,” a “rental car facility charge” and a “vehicle license fee.” 
Hotels
  • My St. Louis hotel bill this weekend included a 3.5% “hotel/motel” tax and a 3.75% “convention tax” ... making the fees a little over 7% of the room charge.
Perhaps associations should “steal the idea” from governmental agencies. Just think of it, you could add a “processing fee” to your member dues; or a “concession charge” to the conference registration fee.

Well, maybe not as our members may see that you are just trying to grab more money without raising your dues or registration fees!

PS.  If you don’t read the WSJ article, here are some of the added home fees they cited:
  • $3,500 for customized architectural plans for each lot
  • $8,000 for new type of storm water capture devise
  • Impact fees average $21,000 per home
  • $1,500 to $2,000 per unit in park fees

JULY 27 UPDATE

  • I forgot to mention one of the "worst" hidden fees at many convention properties:  the daily"resort fee."  
  • In just received my bill from the O'Hare Hilton's stay last night.  It had three "fees:" a state occupancy tax (11.9%); a city occupancy tax (4.5%); and a county occupancy tax (1%).  Total fees equaled 17.4%.


Thursday, July 21, 2016

Ted Cruz, Republicans & Association Law


NOTE: This is NOT a political statement nor political endorsement. Rather it is commentary on how political actions can showcase association issues.


Last night and again today, Republican Senator Ted Cruz – in speech and followup meetings – illustrated association board members who fail to abide by the Duty of Loyalty.

Background: 
  • Meeting in Cleveland, the Republic Party nominated Donald J. Trump as its nominee to be President of the United States. Senator Cruz – a runner-up in the nomination process – spoke at the Republican Convention Wednesday night. He outlined his principles for presidential policies but “refused” to endorse Trump. In comments to the Texas delegate Thursday morning, he repeated his principles and added “it’s not my job to support the leadership team; it’s my job to support our principles.”
Has your association experienced such a rogue director?

I have and it is not easy. And, I find many association directors have no clue about their obligations under association law.

The Cruz case – like those of rogue directors – highlights a violation of the Duty of Loyalty.

Here’s the definition I have used in board orientation sessions ... it comes from several attorneys who specialize in association law:

Duty of Loyalty. 
  • The second fiduciary duty imposed on directors is one of loyalty to the association. Directors are required to make decisions based on what is best for the association, not what may be advantageous to their company or even to their constituency within the association--in other words, retailers as opposed to manufacturers or distributors.
  • Once the board of directors makes a decision, each director, even those who may have opposed the course of action chosen by the board, must act consistently with that decision. Disagreement is permitted, but director actions inconsistent with the board decision are not.
As I’ve led board orientation sessions for association boards, many directors “challenge” the duty of loyalty. They struggle when I say “if you remain violently (and verbally) opposed to the board’s decision, your only choice is to resign from the board.”

It is a hard choice but, for associations and corporations, it is the correct (and legal) choice.

In the case of the Republicans, the Duty of Loyalty means Senator Cruz should resign from the Republican Party. The same goes for a rogue association director who speaks out against association policy and direction.