Category Archives: AGM

How to Choose an Association Management Company

money-saving—6 Tips to save time and money

Association management companies (“AMC”s) provide operational support for small membership organizations– typically with an all volunteer board, no office and no full-time staff. These firms manage the day-to-day operations of the organization on behalf of the board.

When it’s done well, it’s a seamless service. Members call or email the organization and they have no idea they’re speaking to a third party. The AMC’s staff know the organization and its members and build a personal bond with them. The events get organized, the revenue gets collected and the bills get paid. The board can focus on governing and can delegate the back office activities with confidence that everything is running smoothly.

When hiring an AMC, organizations often make the mistake of assuming they are buying a commodity. This can be a costly and painful mistake. You’re not buying a yard of gravel. You are hiring a key employee. What would you consider in making a hiring decision? You’d look at skills, experience, personality, knowledge and salary expectations. If you’ve only got the budget for an administrator, you would not post the position asking for the attributes of a senior manager. You would put all of the relevant information in the job posting– including the salary range, so you get the right applicants.

You would certainly ask for a C.V. from all your applicants to create a short list but you would not make your decision based on the C.V. alone. You’d interview at least the three top candidates to assess their attributes, knowledge and judgement and to get an idea of how well their personality would fit with your team.

Here are a few common hiring mistakes and how to avoid them.

1. COMMON MISTAKE: Ask for a proposal from every AMC on the planet and don’t follow up.

 Many AMCs will not respond to an unsolicited proposal request from an organization they don’t know. Why? Proposal requests are often a “tire-kicking” exercise with no real intent to award an engagement. It’s time-consuming and expensive for an AMC to prepare a proposal so they want to know that you’re serious.

SOLUTION: If you want a proposal from a reputable firm then make a personal connection. Phone them, introduce your organization and tell them why you would like them to respond.

2. COMMON MISTAKE: Keep your budget a secret. Ask for your entire wish list into and see what comes back.

What if you were hiring an employee? Would you keep the salary range a secret and ask for the attributes of an executive when you have the budget for an office manager? The result would be a host of applicants that you can’t afford. If you’re asking for proposals, be upfront about your budget and solicit ideas for the best package for that budget.

SOLUTION: If you have a tight budget, some AMCs will opt out and that’s OK. It saves you time because you only have to focus on the firms who are genuinely interested in serving you at the price you can afford.

Prioritize your needs so that respondents can give one price for your “must-haves” and a second price for your “nice-to-haves”.

3. COMMON MISTAKE: Ask for separate pricing for every item.

Some organizations do this because they want to compare each AMC’s pricing on an item by item basis. Trust me– even if an AMC gives you this information it’s worthless. Every job, including that of an AMC is a holistic undertaking. The greater the number of tasks an AMC does for you, the less expensive it is for them to take on an additional task because parts of that task are probably already included in another activity.

Like an employee, every AMC does some tasks faster and more effectively than others. What you really need to know is how well each AMC’s areas of strength coincide with your “must-haves”. Line-by-line pricing doesn’t answer this question and it will reduce the willingness of many AMCs to provide a proposal.

4. COMMON MISTAKE: Don’t be specific. Use ambiguous phrases like “assist with” and “support as required”.

If your needs are ambiguous then the proposal pricing will be useless.

SOLUTION: Make the effort to be specific. If you’re not sure, then include these needs in a separate section and leave them out of the pricing. Ask the AMC what services they suggest to meet these needs. This is a good way to assess the ability of the AMC to anticipate your needs and provide solutions.

5. COMMON MISTAKE: Create your own RFP from scratch

This is a waste of your valuable time. There are many things you can overlook that are critical to the hiring process and let’s face it– it’s really time– consuming to create an RFP from scratch.

SOLUTION: Start with a template

6. COMMON MISTAKE: Take the lowest bid.

Would you hire an employee simply because they have the lowest salary expectations? The relationship with your AMC is going to last at least 2 years and hopefully longer. They will be the first point of contact with your members and they will be a deciding factor in your sustainability.

SOLUTION: Choose the best AMC you can afford.

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Fear and Loathing – Many Association Leaders Are Missing the Point of Preparing a Budget

business-budgetA lot of smart people hate numbers. They have a vision, they know what they need to do, but for them, preparing the annual budget is a tedious formality and a low value exercise.

The annual budget exercise is the life blood of association sustainability. A good budget is creative, intelligent and practical. It’s the numerical picture of where we’re going and how we’re going to get there. It shows how we’re going to use the money we bring in the door to serve our members. If we create an excellent budget and follow it, line by line, will be both sustainable and successful.

Here are some common, but bad practices, and some best practices:

Common bad practices

Revenue projections: Revenue projections are a “plug” figure

  1. The revenue projections are not thoughtfully prepared. A revenue number is simply inserted to match our planned expenditures. When revenue projections are not met, they’re discounted as “out of our control”!
  2. Performance expectations: As long as we meet the bottom line target at the end of the year we’ve done our job. Individual line items are not respected.
  3. The CFO or Treasurer prepares the budget based on last year’s numbers. The management team is not engaged in the process.

Best practices

  1. Revenue Diversification: If member dues/fees revenue is greater than 50% of the total, we’re vulnerable. Member dues should be important enough to keep us focused on why we exist but not so high that we’re forced to reduce member services during a decline – just when our members need us most. Revenue diversification should be an important objective.
  2. Thoughtful Planning: Every line item in the budget should match our strategic objectives for that area. What do we need to invest in? How can we increase efficiency to reduce costs? Where do we need to focus our revenue sources?
  3. Meaningful tracking: Track budget/actual monthly to keep on top of activity. Saving money on one item is not an excuse to over spend on another expense item. Revenue windfalls are not an excuse to fall short of other revenue projections.
  4. Team engagement: The whole management team should be engaged in the budget process and line managers should have accountability for their sector of the budget.

If you’ve never done a really thoughtful, meaningful, budget, the first time will be time consuming and may be a little painful – particularly if you’re one of those smart people who hates numbers. But it will get easier each year – and you’ll see the results. If you would like help and support to get there ask us about our Leadership Support Program.

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Why do boards hold a vote to “accept the financial statements” at their AGM?

I was talking to one of my favourite clients the other day and he raised this question. It’s always puzzled me, too, but until he pointed it out I never thought to try and explain it.

So I went back to my old friend, General Henry M. Robert. Roberts Rules dictates that the “auditor’s report” – not the audited financial statements, be submitted for a vote of approval. This clarification helps a little but it’s still not clear why the vote is needed.

In section 54 of the original edition he describes adoption or acceptance of reports in general and here’s the relevant content:

”…if the report contains only a statement of fact or opinion for the information of the assembly, the reporting member makes no motion for its disposal, as there is no necessity for action on the report. But if any action is taken, the proper motion…is to “accept the report” which has the effect of endorsing the statement and making the assembly assume responsibility for it.”. <italics mine>

A rough translation might be “…which has the effect of the directors and the CEO covering their respective asses”. If the members vote to accept the auditor’s report then they are voting to accept the auditor’s conclusions with the clear implication that they have read the financials, read the report and agree with its conclusions.

For those organizations that do not have an audit, a report from the audit of finance committee can be substituted for the auditors report.

Happy Bean Counting.

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Preparing for your AGM- a checklist

Fall is a busy season for membership organizations and many of our clients are preparing for their annual general meeting (“AGM”). The three key functions of the AGM are:

  1. To allow the board to meet its legal obligation to report to the membership annually
  2. To elect directors and officers
  3. To vote on any changes to bylaws

There are some things that must be done at your AGM to meet minimum requirements. Your bylaws and local legislation may also set additional requirements – so make sure to check your bylaws and the legislation that governs your organization.

Here is a checklist to help you plan and execute your AGM.

Before the AGM

  1. Fix date and venue
  2. Inform members of date, time, location and key agenda items. Your bylaws may prescribe a minimum notice period and they may also prescribe advertisement of the GAM in local media. Send proxies if your bylaws provide for them.
  3. Prepare the AGM agenda. At a minimum this must include a vote to confirm the minutes of the last AGM and a vote to approve the financial statements. It may also include the following:
    1. Chair’s Report
    2. Treasurer’s Report
    3. Nomination of new directors, officers, re-nomination of expiring directors, officers – if they have not been nominated in advance.
    4. Vote on new directors, officers, and re-election of eligible existing directors. If there are any new directors or officers, or expiring directors who seek re-election,  this vote must take place.
    5. Appointment of the auditor. If the bylaws or legislation require an audit then the auditor must be approved each year for the following year.
    6. Vote on changes to the bylaws. Any bylaw changes must be ratified by the membership.
    7. Vote on membership rate for the upcoming year.
    8. Questions from the floor after each report and before each vote.
    9. Prepare the AGM briefing package. At a minimum this should include:
      1. Agenda
      2. Minutes from last AGM
      3. Chair’s report and/or Annual Report
      4. Treasurer’s Report
      5. Slate of nominees for directors and officers – this will require a vote
      6. Ballots, if required
      7. Roster of existing directors and officers
      8. Briefing materials on any other matters that require a vote
      9. Other business – this typically includes items set by the board and an open-ended offer to the members to raise additional business
      10. Organize submitted proxies, if used
      11. Consider adding a speaker, dinner or cocktails to the AGM to encourage a good turnout. The AGM alone rarely attracts a crowd J

At the AGM

The AGM is typically facilitated by the Chair.

  1. Register attendance so you have documented the members that actually attended the meeting
  2. President’s/Chair’s Report. This typically includes a review of the past year and plan for the next year
  3. Treasurer’s Report. This typically includes a review of the major budget outflows and inflows. At a minimum it must include the organization’s financial statements. If legislation or bylaws require an annual audit then these should be the audited financial statements.
  4. Voting. The attendees must vote and the results announced. If proxies have been issued then the proxies must be counted.
  5. Minutes. Any decisions made at the AGM must be recorded.

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What happens when the Chair loses control of the meeting?

One of our clients recently asked this question:

“At our last AGM one of our members took the floor and refused to relinquish it. He dominated the meeting for 30 minutes asking a series of questions and adding gratuitous commentary after each answer was provided by the board. How can we avoid this next year?”

This and similar problems in board meetings relate to the ability and willingness of the Chair to take control of the meeting and keep it moving. Many Chairs do not have the confidence that they need to enforce proper procedure. This is often because they don’t know what the procedure should be.

One of the services we often perform for our clients is briefing new directors and officers on their responsibilities and providing them with tips and tricks to do their job more effectively.

So here a few tips and tricks:

First of all, be aware of Roberts Rules and your own by-laws. Roberts Rules provides for the following:

1)      members are limited to ten minutes per speech,

2)      members are limited to two speeches per day per question, and

3)      remarks in debate must be relevant to the question

This member was clearly in violation of #1. And at an AGM, 10 minutes per speech is probably excessive.  However, rules are worthless unless they are enforced. This has to be done by the person who is chairing the AGM (usually the Chair of the board). Your best bet is to anticipate the problem in advance and have a well-orchestrated set of tactics to manage it.

  1. The job of the Chair. The meeting Chair has the right and the obligation to close a discussion if it is time to move on to the next question or agenda item. The Chair’s mistake was not stating the rules in advance and continuing to answer the member’s questions after his time was up.  The Chair should have informed the member that his time was up, given him his options and asked him to relinquish the floor to the next question. In terms of offering options he could have suggested that the member contact the board in writing with the rest of his questions and that he would be responded to in due course.
  2. Establish the ground rules beforehand. Before the floor is opened to questions, the Chair should clearly state the rules. For example, the Chair might state that each member is entitled to ask one question and then to relinquish the mic without further commentary.
  3. Use a handler to control the microphone. If you are using a microphone for Q&A, consider having a “handler” on the floor to control the mic. For example, members who have questions raise their hand, then the handler recognizes them and ask them to approach the mic. When they have stated their question he asks them to return to their seat for the answer. While the question is being answered he directs the next questioner to the mic.  Coach the directors in advance to not answer the question until the questioner has relinquished the mic.

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