Defending the position of sporting organisations in the new state of play
The Australian Sports Commission recently published its new ‘Sports Governance Principles’ (Principles) with the aim of improving the governance of Australia’s national sporting organisations to ultimately improve performance on the field.
Together with dealing with general governance principles, the Principles effectively seek to transfer much of the strategic decision-making power affecting a sport from state bodies to an independent board of the national body.
Routinely in the past, a state body would actively and directly participate in the formulation of and vote on the strategic direction of the sport. When it came to voting, a state body would generally be granted votes proportionate to the number of players registered in the state, the rational being that larger state bodies should have a greater role in influencing the direction of the sport, as they represent more players.
Under the Principles, the board of the national body will decide on the strategic direction of the sport, and it is recommended that state member bodies align their strategic direction with that of the national body and implement decisions of the national board in pursuit of that direction.
The Principles also recommend that state bodies have equal voting rights to elect members to the board, irrespective of the number of registered players.
Shifting decision-making capabilities from state members to an elected national board on its face makes sense, as independent boards with ongoing access to information and constant involvement are more able to make right decisions at the right time compared to state body delegates at an annual general meeting.
However, whether the talent pool of those willing and able to sit on national sporting body boards is sufficient for the right calls to be made is not as certain. This is particularly relevant with the more minor sports.
Additionally, the strategic direction of the sport needs to respect the role of state bodies so that individual members at the state level remain energised and free to develop the sport at the grass-roots level, as future on-field performance is ultimately dependent on grass-roots participation.
Sports Minister, Senator Kate Lundy, has indicated that funding to be provided to national sporting bodies will be tied to conformance to the Principles. This has led a number of national sporting bodies recently to propose amendments to their constitutions as well as their charter agreements with individual state bodies to better conform to the Principles to sure-up funding.
The charter of a sporting organisation sits underneath the constitution of the national body and deals with the implementation of strategy and other operational issues to support the development of the sport. State bodies need to ensure that proposed amendments to the charter as well as amendments to the constitution of the national body do not impede on their financial independence and autonomy.
To maintain financial independence and autonomy, state based sporting organisations should seek for the following measures to be provided for in amended constitutions and charters:
- a majority of state members to approve increases to capitation fees, and in the absence of approval fees are only to increase by the rate of CPI;
- financial accountability of the national body so that capitation fees reflect services provided;
- restrictions on the ability to amend regulations which have the ability to materially affect the interests of state bodies without the approval of members;
- adequate grievance procedures which provide that a state member cannot have their membership suspended or terminated until the grievance procedure has run its course;
- advisory committees to recommend grass-roots programs to be operated by state members;
- the ability for state members to develop and own data relating to individual members; and
- the ability for state members to pursue sponsorships, with sponsorships only being prohibited if they directly conflict with national body sponsorships.
Pointon Partners has advised numerous national and state based sporting organisations on constitutional and governance issues and is able to draw on this experience to provide practical advice in the new sporting landscape.
On a separate note, state sporting organisations incorporated in Victoria should be aware that the Associations Incorporation Act 1981 has now been replaced by the Associations Incorporation Reform Act 2012. The changes mean that all incorporated associations (including local football clubs and the like) will need to change their rules to comply with the new legislation. A separate article dealing with these changes will be provided to clients shortly.
If you have any queries on governance or constitutional issues relating to sporting organisations, please feel free to contact Anthony Pointon of our office on 03 9614 7707.