Club industry consultant and impending PhD Warren Tapp works in the arena of club legislation and governance, and has seen some less-than-fortunate incidents that clubs and directors might want to heed.
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I thought it might be interesting to share some horror stories I have seen from my years consulting to Club Boards of Directors.
In one case a director abused a staff member over a minor matter. This resulted in legal action against the club and that director, with significant penalties for both. The director was forced to resign from the Board. The message here is for directors to stay out of the kitchen (operations) and not interact with staff, particularly in an abusive or bullying manner. Instead, the director should have taken their concern to the club manager to deal with it in a more appropriate manner.
In another case a director told the Chair a member had reported to him that the Chair was buying beers in order to win votes for the AGM. Evidence confirmed this was not true. This resulted in a defamation action by the Chair against that member and the member’s expulsion. Instead, the director should have reported the matter to the CEO who would have commenced a disciplinary hearing on behalf of the Board to confirm if it was true and, if not, taken action against the member. The Chair resigned over the damage to his personal reputation by such unfounded allegations.
A small club was in financial decline, and when I asked one of the directors if they were concerned, they responded by saying “I don’t understand finances so not my problem”. It appeared the club had been trading while insolvent for some time and none of the Board knew that or seemed concerned. I explained that s588G of the Corporations Act has very severe personal penalties for all the directors. Ignorance is no defence at law. It seems they had not updated their Constitution for 15 years and had no strategic plan at all or any accurate financial records.
Club directors be aware!
WARREN TAPP
