Fred L. Somers, Jr., P.C.
GENERAL INFORMATION
2 Ravinia Drive, Suite 1200
Atlanta, GA 30346-2130
770-394-7200
770-454-0138 fax
fsomers@somerslawfirm.org
© 2008 Fred L. Somers, Jr., P.C.


Recently, one of our private club clients requested we furnish it with some of our corporate policy templates. The
request stimulated a concern that while most private club governing boards and executives generally are careful to
monitor and keep bylaws and club rules up to date, many of them do not pay much attention to written policy outside of
the bylaws and rules until an urgency is present.  

However, attempting to formulate policy in the middle of a crisis or urgency may prove to be futile.  Indeed it is
probable many if not most clubs do not even have a crisis management policy.

Written organizational policy is as much part of the club's private organic documentation as are its possibly director,
officer and management personal liability.  Its absence may also adversely affect liability insurance coverage, capacity
or premium cost.

By the term "private organic document" we mean any document (other than the club's public organic documents, e.g.,
its articles or certificate of incorporation, filed as a public record), that also determines the internal governance of an
entity. [2]  

Organic documents are distinguished from organic law, i.e., the statute(s) principally governing the internal affairs of a
club or other organization. [3]

As a result of the passage of SOX, [4] some provisions, such as protection of whistle blowers and prohibiting destruction
of corporate records, have been deemed to apply to all entities, including nonprofits.  Further, many states have begun
enacting laws applying SOX-like provisions to nonprofit corporations.  Finally, other SOX provisions may be applied to
nonprofits through "best practices" emerging in response to SOX.  Thus, pertinent provisions of SOX and applicable
state law emulating SOX, may be thought of as constituting organic law as applies to nonprofit clubs.

Written club policy needs to exist independent of the club's bylaws and rules.  First, some policy needs to be flexible to
meet changing factual and legal conditions. If member approval of bylaw amendments is required, the time it takes to
effect amendment to reflect necessary policy revision may be too slow; further, member approval is not always
forthcoming.  Much of the necessary policy deals with management issues, generally within the sole province of the
governing board's prerogatives. Other policy is directed towards the club's employees and is not appropriate for bylaw or
club rules inclusion but may be incorporated in employee and supervisor manuals or handbooks.

Clubs need to take inventory of their written (and unwritten) policies to insure their currency and adequacy.  Unwritten
policies should be reduced to writing and adopted by formal board resolution.  "Sunset" procedures should be in place
for policies to ensure their periodic review, revision or termination when appropriate.  Policies affecting members
should be periodically published to insure member awareness and adherence.  Long standing policies should be
considered for inclusion in the club rules themselves.

While we have been privileged to assist numerous private clubs with their articles, bylaws, rules and employee manual
revisions or amendments, we are not called upon very often to assist with evaluation of their stand alone policies.  We
suspect but do not know that the failure of our club clients to request assistance with policy formulation or updating, is
a function of their unawareness of the need for and thus failure to adopt and maintain the necessary written policies
necessary to protect the club, its directors, officers and professional management from unnecessary legal and other
risks.

 "Best practices" for private club governing boards and management should encompass the maintenance of a directors
manual given to all board members upon assuming office.  The manual should include not only the basic private and
public organic documents, i.e., the articles and bylaws, but all club rules and written policies adopted by the board and
not previously revoked. A code of conduct for board members is normally included in the director's manual along with
other material believed to assist directors in the pursuit of their duties.

By way of illustration, but not limitation, among the policies we recommend for consideration are the following:  
Records and Data Retention, Destruction and Safekeeping Policy; Employee Records privacy and separation;
Whistleblower; Media Relations; Anti-harassment; Member Privacy; Collections; Lightning; Website Privacy; Security;
Alcoholic Beverage Server; Conflicts of Interest (directors and employees); Crisis Management (who speaks for the
club?) and Confidentiality.



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[1] Club rules themselves may be also considered as "policy" as adopted by the governing board. The basis for
considering policy as a constituent of the club's private organic or governing documents is usually by virtue of the
bylaws themselves giving the board authority to make rules and policies for the operation and management of the club
and its affairs.    
[2] Occasionally, when reviewing a club's bylaws for the purpose of recommending revision to comply with modern
private club "best practices" or for statutory compliance, we find conflicts between the bylaws and articles of
incorporation. By statute, these conflicts are normally resolved in favor of the articles as the articles are of a higher
order of legislation.
[3] See Proposed Model Nonprofit Corporation Act Third Edition,  February 2006 Exposure Draft, Chapter 1, Subchapter
C, Section 1.30 (American Bar Association Section on Business Law Committee on Nonprofit Corporations), for the
distinction between organic law and organic documents and the distinction between public organic documents and private
organic documents.
[4] The American Competitiveness and Corporate Accountability Act of 2002, commonly referred to as Sarbanes-Oxley
or "SOX."