Associations Executives Summit II
• 19 November 2014
• Proudly arranged & organised by PCAAE
• Presentation by
– John Peacock, Associations Forum
PCAAE AES II November 2014
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
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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
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Education and training as the basis
Publications and communications
Surveys and research
Consulting and advice
• Collegiality, camaraderie and friendship
• Association management can be lonely!
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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
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1.4 Associations in Context
• Democracy = the freedom to associate (& speak out)
• Core principles
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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
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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
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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
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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
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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
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1.8 Reminder: problems can occur in
an association
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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1.22 Membership recruitment
processes
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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
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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
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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!
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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
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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!
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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
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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!
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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
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2.6 Communications, Promotions and
Publicity
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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
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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
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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
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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
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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
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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 mustrenew organisation
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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
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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
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2.14 Human Resources requirements
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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
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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
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2.16 Budgeting and Finance
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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
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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
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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
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2.19 Databases, Websites, Social
Media and Technology
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Website technology
Social media
Databases with CRM
Membership administration
Technology to assist in Board/Committee
papers
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2.20 Office Management
• Disaster recovery & backup
• Occupational health and safety and other
laws
• Technology
• Record keeping
• Insurance
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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
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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
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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”
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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
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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
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2.26 Thank You!
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John Peacock, General Manager
Associations Forum Pty Ltd
www.associations.net.au
+61 2 9904 8200
jpeacock@nfp.net.au
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!
PCAAE AES II November 2014