Senator Reynolds article on sporting governance
Piru just put this up on the Roar
https://www.linkedin.com/pulse/force...inda-reynolds/
The force is back, but how do we protect other sporting teams?
Published on May 4, 2018
Linda Reynolds
Linda Reynolds
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If tonight’s much-anticipated Western Force game against the Fiji Warriors says anything, it’s that you can’t keep a good sporting team down, but it is a travesty that they have had to fight this hard to survive.
After being cruelly cut from the competition by Rugby Australia, formerly Australian Rugby Union, Western Force has returned to compete against international opponents. As the Senator who initiated a parliamentary inquiry last year into the future of Rugby Australia following their shock decision, I couldn’t be happier to see the Western Force back on the field.
But as happy as I am, I’m still bothered by the lack of answers to some big questions.
The purpose of the Senate inquiry was to search for answers for the utterly devastated Western Force players, members and grass-root supporters who felt betrayed by the custodians of their sport. While the inquiry helped provide supporters and taxpayers with some answers about the process of the decision, it never got to the truth of where the big money went.
It left me still wondering how a governing body could be allowed to operate with such little oversight and at such detriment to the very sport they were meant to be the custodians of.
Over the last few weeks, it has struck me that the mismanagement in rugby is awfully similar to the revelations coming out of the banking Royal Commission, and even the Australian Cricket cheating scandal. They all seem to involve a lot of money, big egos and very little transparency.
Today, governing bodies of major sporting codes are run as companies. Given the enormous sums of money involved, this is not inappropriate on the face of it. But with big sport run by boards drawn primarily from corporate Australia, including from our major banks, they are increasingly run first as businesses and corporate vanity plates and a poor second as long-term custodians and stewards of their sport.
During the Senate inquiry, I came to view the situation of modern sports administration through the prism of two competing sets of responsibilities and actions. The first is between what is financially good for the business versus integrity-based stewardship. The second is between what is legal under corporations law versus what is good custodianship.
It is therefore entirely possible to manage a professional sporting code so it is solvent and complies with corporations law, while slowly destroying the sport itself through bad stewardship. As the administration of Rugby Australia demonstrated, it is also possible to legally manage a sporting code while financially driving it towards insolvency.
The obvious problem is that sport is not just a money-making business – it’s also part of our culture. As Australians, we live and breathe sport, no matter what code we’re watching or how we define what ‘football’ is. Sport keeps young Australians active, healthy and engaged. Junior sport can even provide a great pathway for young Australians into professional leagues, both here and internationally.
Clearly, sports teams and their governing bodies need to remain profitable, but that need must be balanced with the need to protect the sport itself.
Beyond the sporting aspect, all businesses need to be accountable to their stakeholders.
Last year’s Senate inquiry found that despite lucrative broadcasting right contracts, Rugby Australia had been in deep financial and cultural trouble for many years. This was a fact not made clear to their financially neglected grassroots and almost impossible to discern from their glossy annual reports. Evidence uncovered during the inquiry was that this led to highly dysfunctional actions that were not in the best interests of the sport itself.
Enough is enough. While major sporting codes are businesses, administrators must no longer be able to hide behind corporate shields to avoid transparency and accountability to their grassroots.
Boards must become as equally accountable for their custodianship as for their legislated responsibilities. They must demonstrate that they and management are living up to the codes of conduct they should be enforcing on players. Financial sponsors also have a role in undertaking greater due diligence on the administration of the sport before they sign deals.
Constituent bodies of major sporting codes must be empowered to ask the hard questions of both management and of the board, and to have those questions answered.
A good governing body recognises all aspects of their role and may do this instinctually – there are certainly successful examples out there. But where goodwill and a shared commitment to transparency does not work, there has to be somewhere to go to for governance and stewardship concerns that are not within the remit of ASIC. The Australian Sporting Commission should have greater responsibility for encouraging and supporting more effective custodianship and working more closely with ASIC.
Not all major sporting codes have lost touch with their integrity and grass-root responsibilities, but clearly some have, and other may in the future. We can’t legislate for integrity and sportsmanship, but we can and must find ways of ensuring greater administrative transparency, stronger grassroots engagement and longer-term effective custodianship of our treasured sporting codes.
It is not just the regulation of our major banks that need a shakeup – so too does the administration and stewardship of our major banks.
