Governance Committee’s Recommendations on Governance

August 4, 2003

This study was conducted by Management Advisors, Inc., Management Consultants
Contracted by the AHA Governance Committee

 I. INTRODUCTION

A.  PURPOSE OF REPORT

This report summarizes the findings, conclusions and recommendations of the Arabian Horse Association’s Governance Committee consisting of these eight members:

Barbara Burck, Tom Connelly, Bob Fauls, Bill Hughes, Van Jacobsen, Henry Metz, Howard Pike, Alan Sankpill

 The Governance Committee was assisted by consultants from Management Advisors, Inc. who also conducted surveys and helped with the development of a strategic plan for the Association.

 In early April 2003, Management Advisors, Inc. (MAI) was engaged by AHA to work with the Governance Committee to undertake a three-phased project involving the development of a strategic plan and conducting a governance study. Phase I involved obtaining background information and developing a comprehensive understanding of the Association and its plans for the future. This was primarily for the benefit of the MAI consultants, but it also helped the Governance Committee put AHA policies, traditions and operations in perspective. As part of this phase, multiple telephone interviews were conducted with Delegates, Regional Directors, other members of the Board of Directors, and members of the Executive Committee. Phase II of the project involved undertaking the activities which resulted in development of a strategic plan for AHA. A major component of Phase II involved surveys of current members, past members and non-members, the results of which are summarized in a separate report to the Governance Committee dated July 29, 2003.

 The three strategic initiatives recommended by the Governance Committee are as follows:

1. Increase market share of the Arabian horse within the horse industry

2. Unify AHA as a broader-based organization with a new culture and identity

3. Increase organizational efficiency and effectiveness including staff and member resources

On April 1, 2003, the Arabian Horse Registry of America (AHRA) and the International Arabian Horse Association (IAHA) merged to create the Arabian Horse Association.

Essentially, the governance of the former IAHA was adopted by the new organization, at least as a temporary measure. The purpose of the governance study phase of the project was to obtain a thorough understanding of this current governance structure and the decision-making processes that go along with it. The end objective was to explore one or more modified governance models that could enable the Association to function more efficiently and effectively in concert with the strategic initiatives developed by the Governance Committee and anticipated to be embraced and implemented by AHA.

 B. GOVERNANCE STUDY APPROACH

 In dealing with the issues of governance, MAI first summarized all the key findings relevant to governance gleaned from the surveys, interviews and focus groups conducted during Phases I and II of the project. This summary, presented in Section IV of this report, largely represents the opinions of members, from the grassroots level up to top leadership, regarding AHA’s governance today. In developing suggestions for the Governance Committee to take under

advisement, MAI endeavored to build upon the spirit of the strategic initiatives developed during Phase II of the project. That spirit calls for a broader-based organization with clearly defined roles and enhanced responsibilities for AHA staff led by a Chief Executive Officer (CEO) to take on some additional duties and responsibilities that are now in the hands of volunteers. This is a change in the organization and how it is run.

 The following section of this report (Section II), discusses the traits that are usually found in highly effective organizations. This is followed by a description of AHA’s governance today and member opinions on AHA’s governance. Finally, the last section of the report, Section V, deals with opportunities to modify AHA’s governance and the Governance Committee’s recommendations for consideration by the leadership of AHA.

 II. TRAITS OF HIGHLY EFFECTIVE ORGANIZATIONS

 A.    ASSOCIATIONS ARE BUSINESSES

Perhaps because most associations are non-profits, they sometimes do not see themselves as businesses. However, associations are required by laws and government regulations to function just like for-profits and other businesses. Some of the ways in which non-profits and for-profits are similar include:

   q         Generate funds for growth, modernization and new initiatives

q         Compete for the same good people

q         Pay competitively

q         Provide ordinary, customary, and competitive benefits

q         Abide by Federal Wage and Hours regulations

q         Recruiting and hiring practices must comply with EEOC (Equal Employment

            Opportunity Commission) regulations

q         Employment practices must be in compliance with state and federal       regulations with regard to non-discrimination and work rules

q         Top-level and middle-level employees must be able to obtain training and

            advance their careers

q         Executive and management staff must be able to participate in peer       professional organizations at the employer’s cost

q         The organization must actively market and promote itself, its products       and its services

q         A strong image and brand identity is necessary

 C.    NON-PROFIT IS A TAX STATUS

Non-profit is a tax status, not a business philosophy. The best non-profits recognize that it is okay to make money and essential to have revenues exceed expenses on a consistent basis. The highly effective organizations are market driven and devote significant resources on market research, competitor analysis, promotion and brand identity. They constantly focus on present organization needs and anticipate future needs while devising the best means for delivering the organization’s products and services. Market driven organizations also look at what their competition is doing, not necessarily to emulate them, but to at least know what the competition does well and not so well. The bottom line on highly effective market driven organizations is that they strive to expand and improve their services to their constituents and maintain a high degree of constituent satisfaction.

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Lorry Wagner, Copyright 2004