Associations Executives Summit II 19 November 2014 Proudly arranged & organised by PCAAE Presentation by – John Peacock, Associations Forum PCAAE AES II.

PCAAE AES II November 2014

Associations Executives Summit II

• 19 November 2014• Proudly arranged & organised by PCAAE• Presentation by– John Peacock, Associations Forum


1.1 John’s career in association management

• Bachelor of Commerce from University of NSW, Sydney• In my 20’s: large commercial eg Ernst & Young, Proctor

& Gamble• In my 30’s: middle manager, solo employee Executive

Officer, Executive Officer with 6 staff• In my 40’s: established Associations Forum: training,

information & consulting• In my 50’s: growing AF & assisting associations in Asia• Why I like the associations and charities sector


1.2 About Associations Forum

• Commercial entity assisting associations• 450 members; largest Australian/NZ event; Singapore;

Malaysia; India; HK; South Africa; The Philippines• From viewpoint of services, similar to an association

– Education and training as the basis– Publications and communications– Surveys and research– Consulting and advice

• Collegiality, camaraderie and friendship• Association management can be lonely!


1.3 The Associations Sector in Australia

• 600,000 entities: charities, community, sports, associations

• Perhaps 30,000 entities that employ staff• Competition in some areas between commercial players

and NFPs• AUD$43 billion to Australian GDP• Associations meetings boost delegate knowledge &

meetings business• Current discussions re Regulation of the sector• The associations sector: influential, independent and

booming


1.4 Associations in Context• Democracy = the freedom to associate (& speak out)• Core principles

– Independent = not controlled by another entity– Freedom to join– Stewardship is handed on to others– “Mutual” entities: members don’t have shares they can sell– No distribution of accumulated equity

• Distinction between charities and associations– Charity = good cause– Association = any cause, and self-interest is OK!

• Types of associations– Trade / industry and professional associations– Sports, arts and special interest associations– Charities, community groups, overseas aid, NGOs

• Local, national and international associations


1.5 Scale, type and scope of association makes a difference

• Scale matters in governments and companies– USA compared to East Timor– Apple compared to a small business

• Issues relating to type of association– Can we generate income from members?– Are we reliant on donations and government funding?– Will corporations pay to gain access to members?– Are volunteers willing to hand over to management?

• Scope of association– Can we increase membership, including from other countries?– Are we broad based or niche/boutique?

• Benchmark yourself to similar associations • Do the best possible work regardless of who you are!• Association Executives Summit is about things in common to all


1.6 Issues for associations whether large or small

• Constitution is your mini-law - must be relevant and clear – it states structure eg Board composition

• Mission leads to Strategic Plan; Plan leads to Budgets • Relevant services must generate a surplus overall• Positive and ethical behavior and culture• Good administration, infrastructure and staff• But how to achieve this?• When funds permit, Board needs to employ capable

management to run the association - and take a step back to be watchful and vigilant


1.7 For ongoing viability, major change may be required

• Most associations are viable: some tiny, niche causes exist for years

• Merger with other organisation(s)• Evolution (or revolution) in what association

does/Mission• Internal changes in Constitution, Governance,

Operations, Services


1.8 Reminder: problems can occur in an association

• Scandal or fraud• Going broke• Confusion as to purpose• Internal schisms, factions and politics• No regular transition to new Directors• Poor governance by the Board• Micromanagement by the Board• Wrong person as CEO• Not getting professionals to assist when required


1.9 Constitution contents• Purpose / Objects• Members

– Defining who can be a member; expulsion of a member’– OK to be exclusive and particular, but not discriminatory– Stating who has right to vote at a “General Meeting”

• Directors– Who appoints and how; how to dismiss them– Office Bearers should not make decisions separate to the Board– Composition, length of term and term limits for Directors & Office

Bearers• Procedural stuff• Constitutions should include “locked-in” matters requiring AGM

75%; not operational matters


1.10 Board Meetings (for Directors) cf. General Meetings (for Members)

• Board Meetings can happen frequently and at short notice according to needs– General Meetings require 21 days notice

• Subject to previous advice, any subject can be raised and decided on-the-spot at Board Meeting– General Meetings require documentation stating the matters

to be covered and no motions should be raised from the floor• Directors should not be able to give proxies to another

Director - and Alternate Directors are not recommended– Members should be able to vote in person or by proxy at

General Meetings


1.11 Core documents I ask for:

• Constitution – can be changed by member vote• List of Office Bearers and Directors (and how long on Board

and indication of “day job”)• Board Governance Charter – can be changed by Board• Minutes of 2 or 3 recent Board meetings plus AGM• Staff organisation chart – can be changed by CEO• Annual Report (the words describing activities)• Audited financial report (plus for 5 years)• Strategic Plan• Budget• Other key documents


1.12 Issues in Good governance and effective Boards

• Governance as distinct from management• Respective roles of Board/Committee and

Staff• Board/Committee & Officers Responsibilities• Role of the Chair• Avoiding conflicts of interest• Transparency and measuring risk• Board selection, evaluation & assessment


1.13 Definition of Governance

• “Corporate governance is the system by which companies are directed and controlled

• Boards of Directors are responsible for the governance of their companies

• (Members) role in governance is to appoint the Directors & the Auditors and to satisfy themselves that an appropriate governance structure is in place.”

• - Cadbury Report (UK) 1991


1.14 Fiduciary duty at Common Law

• “A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.”

• - Bristol & West Building Society v Mothew [1998] Ch 1 at 18 per Lord Millett (UK)

• “. . . a director must act honestly, in good faith, and to the best of his/her ability in the interests of the organisation. The director must not allow conflicting interests or personal advantage to override the interests of the organisation.”

• High Court of Australia


1.15 Director’s duties (Australian) statute law

• Act in good faith• Act with due care and diligence• Not to gain personal advantage by improper

use of position• Duty not to misuse information• Duty not to trade while insolvent


1.17 Association Director’s Duty to Act in Good Faith

• act honestly, exercise power in the interests of the organisation & avoid conflicts;

• exercise independent judgment• take positive action


1.18 Association Director’s Duty to Act in Due Care and Diligence

• The question to ask is – what would a reasonable person have done?

• Expected to have basic financial skills• Must objectively assess information

presented


1.19 Association Director’s Duties also include:

• Not to gain personal advantage by improper use of position

• Duty not to misuse information• Duty not to trade while insolvent


1.20 The human factor in associations

• People are naturally cautious about change• Leadership styles and ability to Chair meetings• Some people are ‘martyrs’, work too hard, are control

freaks and poor at delegation• A few abuse process, behave poorly in meetings and

send untold unnecessary emails• Change management requires process,

communication and time!• Associations should have processes and systems to

minimise issues caused by personalities


1.21 Growing membership

• Association name must be descriptive: it is marketing in itself

• Reputation is paramount: word of mouth will be your best marketing

• Have systems, processes and clear responsibilities for staff

• Database including both members and prospects is vital• Excel spreadsheets are not databases; on line may not

be necessary• Charge non-members 50% more than member rate


1.22 Membership recruitment processes

• Leads become prospects• Prospects come members• Database as the repository of information• Word-of-mouth recommendations and

testimonials• Member-get-member campaign• Sales & telemarketing• Membership growth needs a campaign


1.23 Retaining members

• People join associations by free choice• Having to be a compulsory member is registration• It is easier (and cheaper) to retain a member than

recruit a new one• Amend, improve and refine the association’s

Mission and Goals if appropriate to what members need

• People or organisations that do not renew often return at a later stage

• Perpetual challenge to be a “must-join” association


1.24 Membership retention processes

• Need for the membership offering to be delivered

• Have a database that tracks all participation and interaction

• Personal attention and customer service• Member needs research through surveying• Appeal to Generation X, Y and Z• Have processes to follow up!


2.1 Assisting commercial aims of members

• A example of where charities and associations differ

• OK to have an association supporting people/businesses who wish to make money

• Industry-specific information can be proved by an association seen as neutral

• Salary surveys are popular• Make your on-line job board the leader


2.2 Education other than at Conference time

• Small events (meetings, workshops, seminars) are important and lead to larger events (conferences & congresses)

• People are time poor, so short sessions are popular• Increasing use of e-learning and webinars• In professional associations, providing CPD (after

university graduation) is an ideal area to offer events• Post-grad qualifications are money-makers when

sought-after in the marketplace (eg CPA)• Plus Special Interest Groups are a winning idea!


2.3 National Conferences and International Congresses

• Large events bring in bigger surpluses• Make your associations conference the “must-attend”

event: eg “the Olympics of Accountants”• Having a strong national association will assist bids for

World Congresses• Tourism Promotions Board Philippines can assist in

bids for regional or international events• World congresses are major wins for The Philippines• Stronger associations have capacity to run regional or

international events


2.4 Exhibitions / Trade Shows

• Members like to meet suppliers in one place• Exhibitions are very time and cost effective

for association members who buy• Exhibitions are very time effective for sellers• For the association, exhibitions can be very

profitable• If your association doesn’t run it, someone

else will!


2.5 Awards and Other Events

• Popular if well handled and respected• Start small and build• The awards by AMPAS are famous, but less so

the association that runs them… (who are AMPAS?)

• Awards programs are also popular with sponsors, hence profitable

• Other special events, including sports days and networking


2.6 Communications, Promotions and Publicity

• Communications sub-plan is required• Printed magazines and journals: still alive and healthy• Annual reports• Delivering content on multiple platforms• Media campaigns for the association brand or issue• E-newsletters are popular if sent sparingly• Websites have replaced physical libraries• Dedicated “social networks” are popular, rather than • Income can be generated from communications eg ad

sales


2.7 Setting Standards for your industry or profession

• If the association does not set and enforce standards, government may do so instead

• Public interest needs to be considered, not just member interest

• Code of Conduct / Ethics is foundation standard• Accreditation and “Aspirational professional

designations” (eg CPA) will be very popular if they increase member income

• Associations should self-regulate and have standards higher than ‘mere’ licencing

• Disciplinary procedures are required for fairness


2.8 Position statements and advocacy

• As independent entities, associations are allowed to have policy ‘position statements’

• Positions on relevant matters need to be thoughtfully developed over time – but be prepared

• Most advocacy is done softly and gradually• Advocacy in some nations has influenced changes

of government• Media management skills• Crisis communications


2.9 Research & Development into science behind your association

• This is Research & Development into the “art and science” of the association, not member needs survey

• Advances can result from quality research• Associations often foster research by

academics• Scholarships can be paid for or sponsored


2.10 Selling other products or services

• Resources or guidelines• Insurance (some associations are rich from

insurance)• Less successful if against free market

offerings• Find out what your members already need

every day


2.11 Surveying members regarding their needs

• Organisations must know what their customers want

• More senior members on Boards can lose touch

• Relevant services?• Timely services?• Consider surveymonkey.com• This is all to become a must-join and must-

renew organisation


2.12 Volunteers

• Associations have active volunteers who are usually members

• Associations can’t usually choose their volunteers – or can they?

• Like staff, planning, induction and assessment is important

• No volunteer is indispensable – need succession plan


2.13 When affordable, having staff is vital

• Associations need to generate profits, hence retained earnings

• Financial reserves should be used to hire staff• Administrative staff will need to be managed by

volunteers• However, management staff will implement Mission and

plans• Associations will not reach potential without

management level staff• Association staff must have association management

training – and this training motivates staff


2.14 Human Resources requirements

• Staff organisation chart linked to Plan• Job descriptions• Staff recruitment policies and procedures• Training and mentoring• Staff assessment & performance measurement• Fostering positive teamwork• Sometimes, paid staff respectfully “manage”

volunteers• Employing staff in income generating areas• Utilisation of volunteer sub-committees


2.15 Overview of association finances

• “Not-for-profit” is the wrong term: surplus or profits are necessary

• Reserves are never to be distributed to members• Directors can be reimbursed for reasonable

expenses• Adequate or large financial reserves are important

for future growth• Financial reporting in associations is sometimes poor

- yet should not nor need not be substandard• Budgeting can be linked closely to Plans


2.16 Budgeting and Finance

• Basic financial and bookkeeping principles• Importance of utilising modern accounting software• “Activity Based Costing” budgets• Finances over ten years and the annual external audit• Presenting finances to the Board/Committee• Official financial reporting requirements• Managing bank accounts• Systems to facilitate E-payments• Investment strategies including property• From Treasurer position to Audit & Finance Committee


2.17 Financial management

• Modern accounting software• No needs for volunteers to sign small amount cheques:

separate accounts• Volunteers must review what payments have been made• “Activity based costing” is vital so you know what part

of the association is profitable and what part is not• Allocate salaries to projects, hence real costs will be

known• Of course, losses are OK• Diversify income sources


2.18 Sponsorship is valuable extra income

• Suppliers to your members will want the opportunity

• Suppliers should not get and don’t expect to have a vote

• Exhibition booths and advertisements in journals are first likely activities

• Prices can start reasonably low and increase in future years

• Ideal if one staff member co-ordinates all sponsorship approaches


2.19 Databases, Websites, Social Media and Technology

• Website technology• Social media• Databases with CRM• Membership administration• Technology to assist in Board/Committee

papers


2.20 Office Management

• Disaster recovery & backup• Occupational health and safety and other

laws• Technology• Record keeping• Insurance


2.21 Introduction to Planning• Every organisation (corporate, government or association) needs a

Plan• Associations particularly need Plans as there are non-financial goals• Planning days are motivating: Board and Staff share ownership of

the Plan• Independent facilitators that understand associations are necessary• When you know your Plans, and the financial picture is clear, a

Budget can be developed• Association plans will be strategic plus operational• Plans must be referred to at every Board meeting• Ownership of the Plans within the association


2.22 Mission, Goals and Activities

• VISION is big picture for the industry, profession or cause – optional as less relevant to associations

• MISSION is vital: purpose for the association’s existence

• GOALS are timeless and are there to achieve the Mission

• Specific ACTIVITIES are current and are there to achieve the Goals


2.23 Plan practicalities and implementation

• Moving from high-level planning to operational details and budgets

• Performance management, review and Reporting to the Board/Committee = use a grid / table format

• Organisation capability, risk management and monitoring KPIs

• Issues with good governance and the Constitution• Selling benefits to management and

Board/Committee of the planning process: Communicating the Plan and “champions”


2.24 Moving from “management” to “governance”

• When sufficient money in the bank, staff should be employed

• Paying for administration is the first, easier step• Hiring an association professional who will manage is a

harder step• Constitutions need to change when management staff

appointed, and the culture of the Board “managing” the association

• Let volunteers enjoy their time, not be overworked and suffer burnout, and become do oversight, not everything


2.25 Associations must grow!

• Like corporations & nations, associations must grow

• If associations are stagnant, they will be superseded

• Major events are motivational to an association• Volunteers need to agree to growth then hire

management staff• Once capable senior staff employed, set Plans

and targets


2.26 Thank You!

• John Peacock, General Manager• Associations Forum Pty Ltd• www.associations.net.au• +61 2 9904 8200• [email protected]• Welcome to Associations Forum Australia Conference

in Adelaide: 14-15 July 2015• Journals, flyers and business cards available• Special thanks to delegates and leadership of PCAAE• Drop me a line anytime!

mailto:[email protected]

Associations Executives Summit II 19 November 2014 Proudly arranged & organised by PCAAE Presentation by – John Peacock, Associations Forum PCAAE AES II.

Documents

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