This is the conclusion of a two-part blog post.
Some Additional Basic Guidelines...
In my last blog post, I covered the basic rationale for a compliance and dispute resolution (C&DR) policy for trade associations. I described some of the key components: getting buy-in from the membership to initiate a policy; establishing a working group of staff and member-volunteers; developing a compliance framework document; creating a compliance committee; and drafting rules of procedure.
In this article, I’ll review some additional basic guidelines that can assist in the development of a C&DR policy. As noted in the earlier post, every trade association is different, and its leadership, existing bylaws and mission can all help guide the policy’s creation. I hope the guidelines below will spark some ideas or shine some light on possible obstacles, allowing your team to efficiently put together a policy that is best suited for your association.
Time Limits
As your working group drafts the rules of procedure, each step of the process should include a time limit. The underlying reason for this goes to fairness for all the parties involved, as well as providing for a consistent application of the policy from one case to the next.
“Your draft may very well end up outlining a process that takes six months or even longer to complete. ”
To give just one example of what I mean by time limits, my earlier post described the role of association staff in preparing an initial brief for the compliance committee about the complaint or alleged violation of association policy. In the case of the International Association of Antarctica Tour Operators (IAATO) – the association where I previously served as director – the committee would then have ten business days to respond to the brief.
Safety Last 1928
That seems a reasonable amount of time, but when these ten days are added to similar limits for all of the other steps in the rules of procedure, your draft may very well end up outlining a process that takes six months or even longer to complete.
That might be fine; after all, the process is supposed to be methodical and deliberative. I suggest keeping a spreadsheet that tracks the maximum number of days allowed in each step of the process along with the running total. This will provide some overall perspective, allowing you to trim time limits here or there as appropriate, and to make sure the entire timeframe is practical.
Another thing to keep in mind is how long the entire process might theoretically take relative to the next regularly scheduled association meeting. It might be the annual meeting where the allegations, should they be serious enough, would be reviewed and voted on by the membership. This issue of duration should be factored into your rules of procedure. For example, are there enough total business days to get the review process completed before the next regular meeting? Should an extraordinary meeting be scheduled? Or, might some fast-tracking mechanism be included to deal with such a possibility?
Rights of the Respondent
I’ll also touch on this topic a bit later in this post (Legal Review and Limitations of Sanctions), but in order for the C&DR policy to be fair, a high degree of transparency and open communication is imperative among the parties involved, even if there is basic disagreement over whether association policy was violated. If a member is accused of violating bylaws or directives – let’s call this member “the respondent” for the purpose of this blog post – he or she needs to know about it shortly after a complaint is lodged.
“Certainly, no one wants his or her association to create a Star Chamber.”
Twelve Angry Men 1957
The respondent also must have opportunities during the various review steps of the process to communicate directly with the complainant or observers of the alleged violation, the association staff, the compliance and executive committees and, ultimately, the membership. While it’s not a legal process, the C&DR policy must allow for discovery, whereby the respondent can review any documents, statements, interviews, photos or other material brought forward during the process by anyone and everyone. Certainly, no one wants his or her association to create a Star Chamber.
The review process also should provide the respondent with opportunities for dismissal of the complaint along the way. The vast majority of disputes and compliance issues likely will be dealt with by the parties involved in the very early stages of the review process. Just because your association now has a C&DR policy in place doesn’t mean that each violation will inevitably result in a huge spectacle and vote at the association’s annual meeting. Human nature being what it is, we sometimes tend to blow these things out of proportion and think the worst will happen. It’s important to make sure the respondent understands that he or she has recourse throughout the process.
“You definitely will want to ensure that the respondent can vote, both on whether a violation has occurred and the severity of the sanction.”
Speaking of voting, while developing the C&DR policy at IAATO, our working group wasn’t sure if the rules of procedure should allow the respondent to vote, in those rare cases where an allegation would, in fact, proceed all the way to the membership for a decision. The association bylaws hadn’t previously addressed this issue one-way or the other. However, a final legal review of the document set us straight: you definitely will want to ensure that the respondent can vote, both on whether a violation has occurred and the severity of the sanction.
Oversight of the Proceedings (aka Here Comes the Judge)
Here’s another issue our working group mulled over: who exactly should preside over the proceedings? I’m not referring to the earlier stages of a review, but to those more serious cases where the allegations are to be decided by the full membership at a meeting.
“The rules of procedure should take into consideration potential conflicts of interest...”
Inherit the Wind 1960
There are quite a few possibilities – a specially appointed association member, an impartial outsider or non-member, or even the chair of the executive committee. In our case, we dismissed the last possibility since the executive committee, including its chair, already would have approved the complaint going forward to the full membership for a vote.
We resolved this in IAATO’s new rules of procedure by having the chair of the annual meeting – typically a former member with no vested interest one way or another – preside over the proceedings. Again, every association is different, but the goal should be to codify a judge (for want of a better word) who as chair of the proceedings will be objective and impartial. The rules of procedure should take into consideration potential conflicts of interest with this chair position, and with those sitting on earlier review panels – i.e. the executive and compliance committees.
Getting Buy-In by the Executive Committee…and Others
In my experience, drafting the rules of procedure and the rest of the C&DR policy can be a lengthy and detailed ordeal. It’s hard work. As association director, I led the working group of member-volunteers and did my best to keep the executive committee abreast of our progress as we crafted the various components of the policy. And while the executive committee had a reasonable understanding of our progress, they didn’t really have the opportunity or the time to get into the nitty-gritty of the language in the drafts.
“Having a collaborative attitude is an investment in the endgame.”
Looking back, I also had a tendency to sometimes believe the work-in-progress was “our baby,” and that the working group knew better than anyone else how to formulate the components, write the language and do everything else associated with the still-incubating policy. It’s best to get over this way of thinking early on and seek as much input as possible from others. Having a collaborative attitude is an investment in the endgame.
Doctor Strangelove 1964
We did this by conducting a two-day workshop relatively late in the C&DR policy drafting process and immediately after an executive committee meeting that had already been scheduled. The workshop was open to members, and we were fortunate that quite a few felt it worthwhile to attend. Most of the executive committee also found it convenient to stay on after their meeting, and their contributions in the final drafting were invaluable.
At that point, we had pretty good drafts to work with, and the diversity of experience and expertise at the workshop made them even better. Through their involvement, the workshop participants also became invested in the policy, and their “thumbs up” were much more likely to occur when the policy would be voted on at the next annual meeting. In effect, they became ambassadors for the success of policy’s passing muster with the membership.
Perry Mason 1960
Legal Review and Limitations of Sanctions
You may have noticed over the course of the last two blog posts a tendency for legalese at times to creep into my writing. Of course, there is a similarity with legal proceedings, but it should be clear to everyone that an association policy cannot be binding in the larger scheme of commerce, free enterprise and the need for healthy competition in an industry. By this I mean that there can be no association sanctions or threats that would inhibit a member’s ability to conduct business, as this enters the no-man’s land of antitrust law. Stay clear.
“There can be no association sanctions or threats that would inhibit a member’s ability to conduct business, as this enters the no-man’s land of antitrust law. Stay clear.”
Contact legal counsel with experience in these matters to review your policy components and rules of procedure, once the working group and the executive committee agree to them. While you may not need a lawyer to put the pieces together, you surely do need one to assess the nearly finished product. This will help ensure your policy doesn’t veer off into antitrust territory. Legal counsel also will help you tighten the language in your final draft. Money spent at this point is money invested in the long-term viability of your C&DR policy.
Selling the C&DR Policy to the Membership
Let’s face it. Most association members don’t have the time to pore through detailed drafts of documents that require their approval to become new policy. So, they will rely on a good executive summary that describes the various components of a new C&DR policy. The summary should anticipate the major concerns and questions that the membership might have, and offer succinct answers. Make it as easy as possible for them to understand and to comfortably vote on the issue.
The summary also should provide a brief road map tracking the membership’s initial approval to develop such a policy and any interim updates that kept them informed of progress. No member should feel as if an important new policy is being thrust on them unexpectedly, particularly one that could result in their being sanctioned at some point down the road. Remind them that the entire process has been created out in the open, with many opportunities for input.
“No member should feel as if an important new policy is being thrust on them unexpectedly, particularly one that could result in their being sanctioned at some point down the road.”
Sample executive summary flow chart for presentation to association members
Short of reading the rules of procedure out loud (not something that I would encourage), they nonetheless need to be communicated in a clear, concise manner. Because of the step-by-step nature of the rules, this is probably best done with a graphic flow chart of the process. Projecting the procedure visually for the membership will go a long way in making its complexity easier to grasp.
A final word: the very notion of a trade association is built on mutual trust and a firm belief in the organization’s mission. To achieve acceptance by the members and ultimate success in practice, a C&DR policy must thoroughly embrace these characteristics. These same traits should underpin the manner in which the policy is communicated to the membership. If you can do this, you’re most of the way home in persuading them to approve your important work.
I set out in this and the last blog post to provide some basic guidelines in developing a compliance and dispute resolution policy. Clearly, I could go into a lot more detail, and would be happy to do so if you have any additional questions or comments. Let me know!
Boom Town 1940