Gaining strength by restructuring association governance.

A new willingness to overhaul governance is reaping interesting rewards in previously off-limits territory.

A few years ago, the Maryland Association of Realtors (MAR), Annapolis, worked with a governance structure that simply wasn't meeting the needs of its members. Mary Antoun, the executive vice president, explains the problem: "We recognized that member willingness or ability to participate in association activities is diminishing. When large groups make key management decisions, they tend to move slowly, which frustrates volunteers and further reduces the number [of volunteers] willing to spend time in association governance. The slow processes we used were threatening to make the association less able to respond to member needs, requirements that are changing radically as the industry restructures. In short, we were in danger of becoming out of touch with our members and their firms in their everyday conduct of business."

Most associations have faced, or are facing, a situation similar to MAR's: changes in member needs and in the operating environment render the existing governance structure obsolete. Until fairly recently, governance was the sacred cow of the association world. When an association failed to meet the needs of its members, management usually took the blame. Throughout the late 1980s and into the 1990s, management structures and operations were continuously scrutinized and modified. Although these adjustments often produced significant increases in efficiency, they tended to be temporary fixes. The more fundamental problems caused by an unwieldy governance structure were frequently ignored because of political considerations.

With the support of ASAE's Education Division, a survey was sent to more than 1,000 chief executive officers and chief financial officers of national and international associations to find out about how associations are keeping pace with the changing environment. In reviewing their responses, I found that their strategies converged in three areas: strategic alliances, management issues, and governance issues. In this article, I'm highlighting aspects of the latter because it seems that it has only been in recent years that associations have exhibited a new willingness to overhaul governance structures.

In many cases among the associations we surveyed, the stimuli that caused the board to restructure were member complaints and subsequent loss of members. For obvious reasons, these two problems are the hardest for an association to ignore. I would also venture to say that associations that kept member needs foremost in their minds throughout the restructuring were the most successful at coming up with a viable structure and, even more importantly, were most successful at turning around membership declines.

By talking to many organizations that have successfully improved governance, I found a number of common approaches.

Reducing board size. The most common complaint I heard was that boards were simply too big. As Antoun explains, "When everyone is responsible, no one is responsible. A large board suggests that an individual vote is unimportant and that absence won't be noticed. It encourages generalized decisions and less responsibility for the direction of the organization and the success of its programs."

Many associations I surveyed had boards with more than 100, or even 200, members. Such cumbersome boards usually develop for two reasons. In many associations, board membership is seen as a reward for prior service, and members who have volunteered significant amounts of time feel entitled to a seat at the table. In other associations, each chapter or region has one or more seats on the board, and the size of the board becomes a function of the number of chapters or regions. In either case, the resulting board is simply too unwieldy to make timely and efficient decisions.

In many of the restructurings we saw, boards were cut by half or more. In the case of the Maryland Association of Realtors, for example, the number of board members was reduced from about 120 to 44, while concurrently statewide, or "at large," representation was increased.

Rethinking board composition. Many associations have drastically cut regional representation in an effort to meet the needs of the entire membership. Although regional representation works well for some organizations, it creates a serious problem for others: A majority of the board often represents small segments of the membership, rather than the membership as a whole.

The way in which the National Association for Healthcare Quality, Glenview, Illinois, addressed its problem was unique among the associations I talked to, but the general approach was fairly common. NAHQ had a typical governance structure, relying heavily on regional representation. The association's novel solution to the problem: It replaced its regional directors with directors representing its core customer functions of professional development and membership services. The result: a smaller, more efficient board that represented all members.

Although many local, regional, and national associations are reducing their reliance on regional-based boards, some international associations are heading in the opposite direction. As an example, Thomas Bolman, CAE, executive vice president of the International Association of Conference Centers, St. Louis, wrote that in 1994, prior to the association's change in governance, one third of IACC's membership was located outside of North America, but 20 of its 21 board members were from the United States. Because of the diverse needs of members in different parts of the world, IACC decided to change its structure to a more decentralized alliance of chapters. Each of these groups has its own board of directors, and the organization as a whole has a "global board of directors," with proportionate representation from each chapter. This action has enhanced participation from around the world.

Eliminating standing committees. Although most committees originate for valid reasons, they sometimes outlive their usefulness. Since standing committees also represent a large time commitment for members, many associations today have trouble filling such committee positions.

In response, many associations are simply eliminating standing committees. When there is a problem to be solved, instead of giving the project to the committee that is least ill-equipped to handle it, the association creates a task force specifically charged with resolving a particular problem. The task force does its job, then dissolves. Terry Feinberg, executive director of the Tri-County Apartment Association, San Jose, California, wrote, "We've completely eliminated the `there's a committee meeting next week, what can we put on the agenda?' mentality. Task forces do not deal with operational issues or `administrivia.'" Because task forces deal with specific problems and generally require a much smaller time commitment than standing committees, it is easier to find volunteers for them.

Lengthening board terms. Although board sizes and the numbers of committees are shrinking, many associations are actually increasing the term lengths served by board members. Associations can ask their members to serve longer terms if they are able to reduce the time commitment involved in governance--and since smaller, more responsive boards usually get more done in less time, this reduced time commitment can often be achieved.

An example of this strategy can be seen at the Maryland Association of Realtors, where in the past board members served one-year terms. As a result, each year brought a completely new board, with the accompanying possibility of a complete change of direction. As part of changing its governance, MAR instituted two-year, staggered terms, creating new continuity and stability for the organization.

Easing transition pains. Although restructuring methods varied from association to association, almost all cited communication as the most important factor in navigating governance changes. Given that the restructuring process reported in the survey took anywhere from about two years to more than five years, it's easy to see what an ongoing challenge it is to sustain communication. Associations that kept their members well-informed throughout the process experienced the least resistance in getting membership approval; they also got through the sometimes painful proceedings in the least amount of time. Restructuring governance is never easy, but the overwhelming majority of executives I talked to felt that the change was vital to the continued success of their organizations.

Andrew S. Lang, an ASAE Associate Member Fellow, is president and chief executive officer of Lang + Associates P.A., Bethesda, Maryland.