Author: editors

Members have received a slate of candidates for the board that was approved by the Representative Governor (another member posts about the nomination process here). Judging from the list, many are ‘status quo’ or of the persuasion that think they know better than most of members. Concerning.

Our Members Union is strongly against the attempts by the current Representative Governor and board to push members into voting “YES” on a loan that they have yet to clearly explain. (Despite repeated requests from many members). We recommend that you VOTE NO on the club line or credit or loan without a concise explanation. Nor do we want the same leaders to continue what has been done in 2020.

The current slate is mostly ‘STATUS QUO’ candidates. With the many TAC missteps of 2020, other members have encouraged competent members to get their names on the ballot.

In order to get your name on the Board of Governors voting ballot, you are required to get signatures from 30 voting members (non-voting members are not counted). You must have also been an active voting member. If you have questions about the process please contact our Assistant General Manager who oversees the process.

SUPPORT The Can DO Candidates

Also, if a member that you know with a CAN DO attitude asks you for a signature to get on the slate, please support them. Remember they have to do it THIRTY times!

We want to see the status quo candidates step aside, as the club needs some CAN DO men and women in member leadership.

Vote CAN DO!
Stay Tuned for our Making A Better TAC Voters Guide

The purpose of the MABT is to bring members together towards transparency for our club from 2010. Members voices should be ringing past the politics of the committees, boards, and other personal interests. After all, we all ‘own’ the club.

Thank you to those who have written posts for the site. We got experienced members on operations, hospitality, nominations, F&B, finance, as well as board members contributing. Who would have guessed all these members would all be working towards clarity again in 2020? Frankly, we all have better things to do.

Most members were perplexed that despite voting down a loan, the board thought it appropriate to do a re-vote, just one month later. With an all out propaganda machine in our lobbies playing videos telling us to vote “yes” on something that was already rejected.

Based on our members social media groups, as well as various member meetings around Tokyo, things are looking good. It looks like a bigger NO this time. Be sure to vote ‘NO’ on a loan. We support our club, and are happy to approve whatever necessary. However, we have to have clarity on getting a loan that could result in losing our facility to a bank if not paid back.

Let’s stay positive and hopeful that people with related experience and guts will take up leadership roles in our club. We’ve got a lot of know-how in our membership.

-Team MABT

One issue that TAC continues to struggle with is transparency. Members still have issues with trusting the Board, Management & the information they are given. This is clearly evidenced by the reactions to the various votes, presentations & the general feedback from members to committees, the Board & management. 

Who Owns The Club?
In businesses it is standard practice for a new CEO to bring in his own management team & department heads. TAC, as we have been told, is not a business. The Representative Governor is not the CEO. The Board is made up of non-executive volunteers. In general both the Board & the Committee Chairs should be composed of people with expertise in their fields, an ability to commit to the time required of them, & a desire to put the Club’s needs & interests above their own . Short of this & there will continue to be questions around how or why decisions are made or policies are created. 

In looking at the current Board & the current Committee Chairs, are we following good governance? Do the current Board members have committee or Club experience? Are they experts in their fields? Are the Committee Chairs experts in their fields? If not why is that? If we are making poor decisions as a Club is it a result of the Board or the Committee chairs? One would have to surmise that the answer is yes. If not then what is the point of both the Board & the Committees? 

Who Chooses the Committee Chairs?
The Representative Governor chooses the Committee Chairs. Those Chairs select who will serve on the Committees. The Nominating Committee Chair selects both who will serve on his committee & has an overwhelmingly strong position in determining who makes the slate of candidates and eventually who is elected to the Board. Is this selection process transparent? If not is it in the best interests of the Club for the Chair, Committee & by extension the Board selections to be made this way? Or the ‘Task Forces’ that are often created? Who has oversight of this process & the selection?

It would make sense for Members (in particular voting Members) to look at the Committee Chairs, those on the Committees, the Board & the slate of candidates. We know what we are told but what are we not told? Why were those members selected but more importantly why were others ignored or left out? 

It seems obvious that change is required not just to the current leadership but in the way that leadership is formed & what their goals are. The Club has developed habits over time that need to be adjusted. It is at times such as now where you can see the cumulative effects of decisions from the past few years from a small, protected group within the Club. 

“Where all think alike, no one thinks very much.” Walter Lippmann

I’m very appreciative of all the time the volunteer board is putting into ‘keeping us safe’ at the TAC recently. However, over the last few months, the same question keeps coming to my mind..

We have two board members who seem to be making all the decisions. The rest of the board has relegated decisions to them from what I heard in the last general meeting (I was remote so maybe I missed something). The member decision makers are- one entrepreneur with an office nearby in the tech business, and the other is a former sales manager at a mobile phone company who is mostly working from the TAC in his independent consulting business. Both guys are volunteering and not from the hospitality business.

Although, I am no longer in hospitality, as a former hotel guy, I wonder;
Why don’t we let the experienced hospitality guys that we hired to run the club, RUN THE CLUB?

Getting experienced people in charge of competently reopening the club, managing the necessary (actual) staffing, and deciding on venues to open and close under the looser guidance of the board of volunteer member-leaders would likely be much more effective.

My opinion, let’s give our GM and team a chance to run the business!

By Mr. Greg Carley (Former TAC President)

While Tokyo has only one full-service expat club, the Tokyo American Club,
 Asia has many with Hong Kong leading  the pack with dozens of elite member
 clubs. TAC can benefit from its Reciprocal Club network.

 TAC with almost 4000 dues paying members holds the area record for revenue
 with the 2020 budget set at $50 million, of which almost 50% is dues and
 entrance fees, and F&B about 30%. Relatively speaking, it is a big club.
 The critical mass for a full-service club is probably 2000 members. TAC has
 400 staff.

 So how does TAC compare to its Reciprocal Club network in the region and
 other clubs? Unsurprisingly, efficiency-wise, not too well. Its Budgeted
 payroll is 59% of Operating Revenue (OR), and its F&B Cost of Goods (COGS)
 was 29% in 2019. In sweeping terms, large clubs are scalable and Payroll
 should be between 40-50% of OR; F&B COGS, 40%.

 HOW TO FIX TAC:
 TAC’s biggest unmined resource is its expat Reciprocal Club network. Here
 it can, on a one-to-one confidential basis, compare metrics, ideas, and
 operations for mutual benefit. Clearly, the payoffs are big, if pursued. As
 well, a number of expat clubs post their AGMs on the Internet; revelatory
 gifts.

 In TAC’s network, the Singapore Tanglin Club has 4000 members and an F&B  business about half that of TAC with COGS about 45%. Its payroll is 40% of  OR. Its dues are miniscule, under $100 while its entrance fee is $75,000.  The LRC in HK is half the member size of TAC, 1900 (capped?). Its  F&BCOGS at 45% of OR; its Payroll at 53% of OR. Size does matter. Dues are about  same as TAC that include a mo. minimum spend of $110. Entrance fee $40,000.

 * Hong Kong Football Club was a recip. club (why not reinstate?) and has a
 robust F&B business at 45% COGS. F&B sales are $13 million which is
 impressive for a 3000? member club.

 *I was not able to find details on the HK & Sing. American Clubs that have
 memberships of 3000 and 3500? respectively. The HK American Club has a big
 entrance fee of $55,000. TAC probably has the highest yearly dues in the
 region at just under $5000 for families.

 Clearly, TAC has a cost problem. Payroll should be under 50% of OR and F&B
 COGS should be about 40% which, ironically, is the % TAC’s 2006 Referendum
 Brochure forecast in the event of Impairment (worst case) scenario with
 revenue at $50 million. Very prescient 14 years ago.

 So where did TAC go wrong? Well, Committees are not the standard for
 successful enterprises. They are called an outdated club model that goes
 back to when clubs could not afford staff. Supposedly, club committees are
 disappearing. Management probably spends 50% of its time in Committee
 meetings. And is there a career path for staff where volunteer committee
 members, often unqualified, make the decisions. No TAC GM or GM’s staff has
 risen through the ranks. By contrast, the current Okura GM started as a
 bell-hop at the hotel

 New TAC went big on banquet space and this should be scrutinized for the
 real costs (payroll, operating and maintenance costs). The budget for the
 Repairs and Maintenance Dept. boggles the mind and should be dramatically
 cut by millions. It appears that other expat clubs do OK at about
 $2500-$3500 F&B per member whereas TAC does not do well at $3500 per dues
 paying member. Something(s) is wrong here. The $25 million payroll is
 clearly way too high. Reduction in highly paid staff compensation makes
 sense. Outsourcing as well. Historically, it was said that the Club is
 really run for the employees. Thus the high pay for some. Undoing the
 damage is hard.

 As TAC is near its perceived member limit, it might make sense to follow
 the HK clubs and raise the Entrance Fee. Maybe Y3 and Y6 million.
 Establishing close, bi-lateral, one-to-one managerial relations with expat
 Reciprocal Clubs in the region can have big payoffs for TAC.

Is it ethical ,or even fair, to call a vote on an issue that was already voted down by the membership? This is concerning. Whether the vote was rejected by 4 or 40, why are members being asked to vote again? Extraordinary is becoming ordinary?

If the club doesn’t need money at this point, why are we being asked to approve a loan (line of credit)? Why are staff not being cut to match the demands of the membership? Isn’t this the largest cost to the club now?

There are many questions today’s announcement brings. Deja vu? What are your thoughts on the topic? Please feel free to comment below. Please remember to keep it positive and constructive.

???—– Original Message —–
“Tokyo American Club”
Saturday, August 29, 2020 2:23:52 PM
Extraordinary General Meeting: September 24

?????Extraordinary General Meeting:
September 24

Dear Member,

At the Board of Governors’ meeting on August 27, the Board approved the convening of an Extraordinary General Meeting (EGM) on September 24

At last month’s EGM, the Board asked Members to vote on a proposal for the Club to take out a line-of-credit-type loan for ¥1 billion with Sumitomo
Mitsui Banking Corporation, our primary lender.

While the proposal only just failed to pass (by four American Member votes), support for the loan was overwhelming, with 85 percent of those who voted
showing their approval. The result convinced the Board to revisit the proposal.

As we explained prior to the last EGM, this line of credit would allow the Club to weather the current period of unpredictability while establishing a
new normal for Club operations. In essence, it would help secure our short-term future. That is why we ask that you vote in favor of the proposal.

Before the EGM, we will host a hybrid town hall on September 8 to answer any questions Members may have about the proposal
and the Club’s financial position.

If you have not already registered as a Voting Member, I urge you to do so and have a say in the future of your Club. Visit the Club website for
information on how to register

Thank you your continued support of our Club community.

Representative Governor
Tokyo American Club

Guys & Gals,

Let me try to show that TAC does not suffer from lack of Revenue but from a bloated payroll. TAC is and has always been a cash cow. Almost half of its revenue is dues & entrance fees, over Y20 OkuIts Revenue from F&B is very competitive with comparable clubs at about Y350,000 per dues paying member. The problem is that almost 70% of F&B revenue goes to payroll.

TAC’s 2020 Payroll Budget is almost 26 Oku, 59% of OR. That is a budget and of course will be reduced. But a big club like TAC is scalable. The payroll should be under 50% of OR. That can pick-up Y6 or Y7 Oki.Thus if you compare like for like, such as the Tanglin Club in Sing. you will, I believe, see under 50% numbers. I keep asking the GM to do a detailed comparison with 4 reciprocal clubs: the American & LRC IN HK & in Sing., the American and Tanglin.

The Tanglin has about the same # of members as TAC and is elite. When I last checked the NYAC, It was under 50%, and that is tough with the highly paid union workers in NYC.BYW, the payroll figures presented at the 17 June Town Hall are not at all correct. The total 400 staff detailed pay only adds up to two-thirds of the 2020 Budget. One-third, almost 10 Oku, is missing. So, if you take, per the presentation, the 300 who supposedly make Y3.2 mm, by exception the remaining 100 staff would be making about Y16mm per head on average.. Clearly not possible. Or is it?

I am waiting for a reply from T.C. Fix the payroll and you will fix TAC. I qualify this by saying none of this should be seen as the fault of the staff. As Milton Friedman said, “When you hold out 100 dollar bills, you see a very long line of people,” Outsourcing is also a source of cost reduction, The annual budget of the Repairs & Main. Dept. boggles the mind. And it is always easier to reduce costs than it is to increase revenue. Hope this helps a course correction.

It seems that staying fully employed but running at half capacity is putting the club under financial strain & is also just annoying members. That’s 0 for 2, just like Rainbow Cafe. No one likes the food, and we lose money.

The Members said NO!

This happened even though management & the board knew the score going in; down 7 votes. So we got the 2 hour dog & pony show. The little guy won.

We all endured a push by the board to get approval to go deeper in debt and possibly lose our club facilities and land unless serious changes to the thinking and business model are not made.

In the meantime, members are cutting family memberships, rental lockers are being cancelled, and paid parking spaces being eliminated. The rumble of members considering canceling their membership increases.

Is this all because our elected leaders continue to keep the club virtually shuttered up, guests banned, high costs for unnecessary staff, and create an inhospitable environment that keeps members from spending money?

Isn’t it time to start listening to members and stop pretending? Stop telling us that you care about members health, long term finances and damaging the club by not letting us use our club house.

With all due respect, TAC has proven poor at predicting and preparing for risk. Historically, we have tended to ignore worse case scenarios, in favor of optimistic predictions, and have paid a dear price.

The worst case scenario in this case is we draw down the entire ¥1 Billion (with the best of intentions, I am sure) increasing the debt service by ¥250,000,000 / year for the following four years. This amount, added to our current debt, even in a very favorable economic predictions is likely unmanageable. In a moderately less optimistic future vision servicing this debt would clearly be impossible and could lead to The Clubs ruin.

While this issue is not addressed in the Treasurer’s report, reading between the lines, it seems the answer may be that we do not intend to draw down the loan facility, so this this will not happen. The question this raises, why create a loan facility in the first place, tempting current and future leaders, if we know it may lead to our ruin if it is used?