OWNERS AND DIRECTORS TESTS (O&DT)
Why are these needed?
Ms. Crouch starts from the position that football clubs are not typical businesses ; it would be more accurate to describe them as institutions of great value to the community they are located in.
As such, they merit a higher standard in terms of stewardship - and in far too many clubs, that standard is not currently being met.
She is firmly of the view that this has to be tackled head on, and standards raised across the board. Her view, simply put, is that :
• holding people to a higher standard leads to better decision making….
• …. and better decision making ultimately means that clubs enjoy a far higher level of protection
One of Ms. Crouch’s key recommendations is that the current O&DT should be replaced by two tests, aimed at each category separately. These are considered in more detail below.
Who will the tests apply to?
Owners are relatively easy to identify in most (not all) cases.
In the case of Directors, the word will be widely defined, to include people who have that job title at a club, but also will take in those people who undertake executive functions, and those who perform advisory roles, and/or have significant influence at a club but do not have a job title that reflects this.
There are a number of disqualifying criteria that already stop individuals taking up the role of Director, and these will continue. They include :
• a record of past insolvency
• a record of dishonest dealings
• suspension or bans from other sports
• influence/control over more than one club
• personal insolvency
• being barred entry to the UK
• being a football agent
What is the owner’s test?
Crouch recommends that the principal way of assessing any owner’s bona fides should be through a business plan which they will be obliged to produce and against which they will be held to account.
That sound bureaucratic - is it?
It may well be, but it introduces a degree of rigour that it not in place at the moment and will ensure that owners can be held to account for the extent to which they do - and deliver - specific things. For example, the business plan :
• will have to set out a strategy for maintaining the sustainability of the club
• must spell out the steps owners will take to protect the club on so-called “heritage” issues - where it plays, what it is called, club colours, the badge etc. (more on this later)
• must specify the manner in which the club will be managed, by whom and spelling out who does what
• must provide evidence of funding covering a three year period
• must set out how the club will promote equality, diversity and inclusion
• must declare any conflicts of interests and how they are managed, to the satisfaction of the regulator
Ms. Crouch goes somewhat further, arguing that the regulator should be able to investigate widely, including looking at a range of evidence of an owner’s character and suitability for their stewardship role.
She also recommends that the regulator, Home Office and National Crime Agency collaborate in identifying any links to wider criminality, including money laundering.
And the director’s test?
Much of the detail here is still up for grabs, but Ms. Crouch identifies a number of areas that it should address without being overly prescriptive :
• there should be a strong emphasis on directors having relevant skills and experience
• consideration should be given to introducing a suite of training approved by the Institute of Directors
• directors should also pass an integrity test…
• …. and be free of any personal or business links to the club owner that would compromise that integrity
Is this just a one-off examination?
No. Ms. Crouch envisages that directors would have to make an annual statement in which they confirm that they still comply with all the rules, and sharing details of any material change in their circumstances that might affect their ability to pass the test.
What happens if owners or Directors make false statements?
All of this will be monitored by the regulator, who will be able to demand access to any documentation they need to reach a view on clubs or individuals. Ms. Crouch recommends that this should be done over a three year rolling programme.
Isn’t three years a long time to wait for wrongdoing to be punished?
Yes, if that is what happens. But the proposal is that the regulator start with “high risk” clubs where there are known concerns or difficulties before moving onto the rest. And if new concerns emerge as the programme unfolds - the regulator can bring forward new cases as needed.
If club owners or directors fail the tests - what happens?
As with other areas of the Crouch Review, the idea is that there will be a sliding scale of response from the regulator. A small, technical failure or oversight should get a response that reflects this.
In the case of more serious failure or wilful compliance, Ms. Crouch thinks that the regular should have a variety of tools at their disposal. These are yet to be settled, but could include :
• imposing sanctions on clubs and / or individuals
• blocking appointments where directors cannot pass the tests
• withdrawing a club’s licence to compete - or placing a club in the hands of a third party administrator in the most serious cases of failure or noncompliance
Any other new aspects to the tests?
The final, and a very important issue, is that of transparency about who the real, beneficial owner of a club really is. Crouch is asking for much stronger rules on disclosure, particularly where owners are based overseas or seek to hide details of the club’s ownership behind complex business structures based off-shore.