Sports Governance Principles
The Australian Sports Commission (ASC) is the Commonwealth Government’s statutory authority responsible for developing and funding Australian sport. As such, the ASC is responsible for the Australian Government’s funding to Australia’s national sporting organisations to develop sporting excellence and increase participation in sport. It is important, therefore, that the ASC has a clearly stated position with respect to the governance of national sporting organisations to which the ASC provides taxpayer moneys.
The sporting landscape in Australia is enriched and delivered through the countless hours of service and support provided by volunteers. Volunteer boards, committees and administrators in particular carry extra responsibilities and burdens associated with the complex legal and regulatory environment within which they must operate. The contribution and commitment to ensuring Australia has a quality environment where people can participate and strive for success is of immeasurable value to the community.
The purpose of these guidelines is to:
- assist members of boards, chief executive officers and managers of sporting organisations to develop, implement and maintain a robust system of governance that fits the particular circumstances of their sport
- provide the mechanisms for an entity to establish and maintain an ethical culture through a committed self-regulatory approach
- provide members and stakeholders with benchmarks against which to gauge the entity’s performance.
The size, complexity and operations of sporting organisations differ, so to optimise individual performance, flexibility must be allowed in the structures and systems that are adopted. This flexibility must be balanced against accountability, contestability and transparency. There is an obligation for all sporting organisations to explain to stakeholders if any alternative approach to the best-practice principles is adopted (the ‘if not, why not’ obligation).
Governance is the system by which organisations are directed and managed. It influences how the objectives of the organisation are set and achieved, spells out the rules and procedures for making organisational decisions and determines the means of optimising and monitoring performance, including how risk is monitored and assessed.
The ASC recognises that effective sports governance requires leadership, integrity and good judgment. Additionally, effective governance will ensure more effective decision making, with the organisation demonstrating transparency, accountability and responsibility in the activities undertaken and resources expended.
It is commonly accepted that governance structures have a significant impact on the performance of sporting organisations. Poor governance has a variety of causes, including director inexperience, conflicts of interest, failure to manage risk, inadequate or inappropriate financial controls, and generally poor internal business systems and reporting. Ineffective governance practices not only impact on the sport where they are present, but also undermine confidence in the Australian sports industry as a whole.
Governance concerns three key issues:
- how an organisation develops strategic goals and direction
- how the board of an organisation monitors the performance of the organisation to ensure it achieves these strategic goals, has effective systems in place and complies with its legal and regulatory obligations
- ensuring that the board acts in the best interests of the members.
The Sports Governance Principles of Best Practice advocate strengthening structures that support good leadership and decision making, and ensure sound and effective governance.
In keeping with best practice in Australian corporate governance, this paper contains guidelines within which the ASC believes a sporting organisation’s board members should operate and enact their role. The resource takes the form of six major principles:
- Principle 1: Board composition, roles and powers
- Principle 2: Board processes
- Principle 3: Governance systems
- Principle 4: Board reporting and performance
- Principle 5: Stakeholder relationship and reporting
- Principle 6: Ethical and responsible decision making.