7 Essential Policies for Your Private Club in 2025
And Best Practices for Implementing Them
By Kerri Rawcliffe, CPA, Partner; Brooke Rossi, CPA, Director; and Amber Stone, CPA, Director
The start of a new year is the perfect time to refresh, renew and revisit the policies and procedures your private club has in place for employees and board members. Evaluating your policies annually is not only good corporate hygiene but critical for sound decision-making and effective management. Consider these seven essential policies every private club should adopt, along with best practices for implementing them.
1. Whistleblower
Most clubs have informal open-door policies that encourage employees to discuss grievances with members of management beyond their immediate supervisor. However, we recommend that your club create a formal whistleblower policy specifically designed to help employees raise their concerns to the appropriate level of the board or management in a confidential manner without fear of retaliation. There are various third-party organizations that offer whistleblower hotline services for reasonable rates. The hotlines are generally available in multiple languages, 24/7 and with both voice and text options.
2. Conflict of Interest
A conflict of interest may exist when a club board member has a direct or indirect interest in a transaction. Generally, a conflict-of-interest policy will clearly define what is considered a conflict, identify what is and is not permitted and outline the proper reporting channels if a conflict is discovered. This policy often includes a checklist that must be signed by a board member that asks targeted questions such as: “Do you or a family member receive compensation from a business doing or seeking to do business with the club?”
3. Ethics
Also essential is a formal ethics policy or code of conduct that defines fraudulent or dishonest behavior and provides examples of such. This policy reminds those in your club community to follow high standards for both business and personal conduct. It should emphasize honesty, integrity and compliance with applicable laws and regulations in conjunction with elevating the club’s mission and values. This policy can then reference other policies as necessary, such as using the whistleblower hotline to report unethical activities.
4. Credit Cards
With the increase in credit card usage, your club needs a policy detailing who can use the card, for what purposes, how much can be spent and what support must be submitted to authorize payment. The policy should explicitly state that employees can only use the card for official club expenses, not personal use. The policy should state that receipts must be obtained and discuss the treatment of a credit card charge when no receipt is provided.
5. Employee Handbook
To provide a comprehensive resource of your club policies, you should create an employee handbook that is distributed to employees annually or available anytime in an employee portal. The handbook should include the first four essential policies in addition to the federal and state-required employment information. Other helpful club policies should also be provided in the handbook such as playing privileges for employees (e.g., golf and tennis), dealing with a disgruntled member, tipping and expectation of member confidentiality.
6. Investments
For clubs with significant holdings, investigating their investment vehicles can be beneficial. Your club should consider establishing an investment committee to develop and follow an approved investment policy. The policy should outline the goals and objectives of the club, provide guidelines for managing the club’s assets and define the responsibilities of the investment committee. The policy should speak to growth and risk considerations, as well as outline allocation guidelines across various investment vehicles (e.g., stocks, fixed income/bonds, currency, cash, etc.).
7. Cash Management
The goal of a club’s cash management policy is to ensure the club has enough cash on hand to cover operations and planned capital needs as well as unexpected situations. A cash management policy is important so that decision-makers understand the club’s in-and-out cash flows each month. This policy should address questions such as how many weeks/months of cash is necessary, whether it will change at different times of the year (on versus off season) and if the club is exposed to any credit risk or Federal Deposit Insurance Corporation (FDIC) limits.
Three Critical Tips for Implementing
- Understand IRS Disclosure Requirements: Note that it is required for tax-exempt organizations and private clubs to disclose their whistleblower, conflict-of-interest and credit card policies on Internal Revenue Service (IRS) Form 990. So, it’s important for your club to have these policies and that they’re strong. Public disclosure exposing this information, or that these policies aren’t in place, could impact opinions about your club’s reputation and the strength of its governance.
- Design Policies to Ensure Fair Treatment: It is critically important that policies are established to ensure treatment of all employees is the same in similar situations.
- Revisit Your Policies Annually: Your policies should be evaluated annually, at minimum, by management and the board. The evaluation should include reviewing both the design and implementation of the policies. Where applicable, employees or board members should sign off to confirm receipt and understanding of the policies.
We Can Help
Having the time or expertise needed to establish sound policies is often difficult for tax-exempt organizations and private clubs operating with lean staff and stretched board members. We can help. Other policies we think clubs should consider include social media, record retention and dress-code policies.
Contact Us
We welcome the opportunity to answer any questions you may have related to this topic or any other accounting, audit, tax or advisory matters for private clubs. Please reach out to your PKF O’Connor Davies client service team or any of the following:
Kerri Rawcliffe, CPA
Partner
krawcliffe@pkfod.com
Brooke Rossi, CPA
Director
brossi@pkfod.com
Amber Stone, CPA
Director
astone@pkfod.com