CORPORATE GOVERNANCE
What is “corporate governance”?
Put simply, it is a system of rules and processes by which an organisation manages the way in which it operates.
Ms. Crouch makes a number of points about it - her belief is that good corporate governance :
• breeds confidence in those who have dealings with the organisation
• inspires trust
• improves the way that an organisation behaves
What is the relevance to football?
• fan loyalty is so strong that some owners are tempted to exploit it
• it is currently very hard to censure (or remove) owners who fall down in this area
• some owners have behaved recklessly and put clubs at risk - or worse
• some owners behave opportunistically rather than as custodians of a community asset
Are there no existing standards to cover this?
Yes, set by both Sport England and in the UK Sport Code for Sports Governance
That sounds a bit of a mouthful. What is it?
It is a mouthful, but the job of the Code is to help ensure that the public at large gets value for money from its investment in sport. And UK Sport has developed the Code to set standards for any sporting body that receives public money.
Does the Code deliver results?
Ms. Crouch certainly thinks so - she observes that we currently have a situation whereby some smaller sports, that have only a fraction of the resources going into football, are still managing to achieve far better standards of corporate governance.
She believes that football as a whole should be at least matching those standards.
How might that be done ?
Ms. Crouch sets out a number of key principles here :
• making good corporate governance a precondition for having a licence to play would concentrate minds
• whatever system is in place needs to be proportionate - you wouldn’t expect Woking to meet the same standards as West Ham United, given their current league status
• an added attraction of the UK Sport Code is that it is proportionate, and linked to the size of the body involved
• Ms. Crouch thinks that a three tier system could work well across the top five tiers of the football pyramid….
• …. though she also thinks that a ratchet effect should be in place, ensuring that although clubs move up and down the pyramid, the standard they are asked to meet can only even move upwards (and not back down again if relegated)
So what would the practical requirements be?
• clubs should have a clear and appropriate governance structure, led by a properly constituted Board
• clubs should recruit to key positions on the basis of skill, experience, independence and knowledge
• clubs should operate in a manner that is transparent, accountable and internally democratic
• clubs should uphold the highest possible standards of conduct
• clubs should adopt policies and processes that are lawful and financially prudent
Ms. Crouch also specifically mentions that the football equivalent of the UK Sport Code should specifically introduce the concept of “stewardship” to describe the relationship that owners and directors have with the club they manage.
How might this be achieved?
Again, she sets out some key principles :
• club Boards should be comprised of at least 30% independent non-Executive Directors
• there should be full disclosure of what non-Executive directors receive in the way of remuneration and benefits
• director appointments should be transparently managed, driven by the needs of the business and made strictly on merit
• all clubs should have a plan setting out their approach to equality, diversity and inclusion (more on this later), specifically in the way that they engage with their fan base
• on financial transparency, clubs should be expected to provide information that is of a high quality and easy to understand - the model followed by Plymouth Argyle was particularly commended
• there should be clear plans for how the club would deliver effective engagement with fans (more below), and other stakeholders
• all club Boards should have someone specifically responsible for safeguarding and welfare issues for players, staff and fans (more below)
• and clubs should set out how they will maintain and protect the club as a community asset
Whilst most of this section of the Review is concern with standards expected of clubs, Ms. Crouch also observes that the Leagues and the FA need to adopt similar standards of corporate governance themselves. The FA in particular needed to look at some of the more archaic and anomalous aspects of its structure.