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Principle 5

Principle 5: Stakeholder relationship and reporting

The board should ensure it exercises leadership, integrity and good judgment, always acting in the best interests of the organisation as a whole, demonstrating transparency, accountability and responsibility to its members and stakeholders.
An effective organisation should ensure its members and key stakeholders are:

  • consulted and involved in the development of the sport’s strategic plan
  • supportive of, and actively involved in, achieving the outcomes of the national plan
  • well-informed and actively participating at its general meetings
  • regularly provided with timely and accurate disclosures on all material matters regarding the governance and performance of the organisation.

Principle 5.1: That the board should strive to ascertain the interests, aspirations and requirements of members and create responses to these in the form of a national strategic plan with alignment between this and member plans.

Commentary and guidance
Existing boards should canvass the interests, aspirations and requirements of key members. The board should have in place a process that reports and receives feedback from members.
All members should embrace the strategic plan of the sport and should work towards the achievement of its outcomes. In federated organisational structures it is essential that member bodies are working towards a unified strategic document and are held accountable for their outcomes.

Principle 5.2: That members of an organisation should have the ability to remove board members (or a board as a whole) and change the constitution, should they see fit, in accordance with applicable legislation.

Commentary and guidance
It is a guiding principle of law that members must have the right to remove the board and change the constitution as they see fit, as they are ultimately the owners of the organisation.
There may be circumstances where certain arrangements are in place that restrict the members’ capacity to make change, however these should only be temporary measures in periods of instability and ultimate power should always return to the members.

Principle 5.3: That board directors should have no voting rights at general meetings.

Commentary and guidance
Where the membership of an organisation comprises other organisations, clubs or groups of individuals, board directors should not be eligible to vote at general meetings or annual general meetings. This ensures a clear separation between the ‘owners’ and the ‘governors’ of the organisation.

Principle 5.4: That the board should provide members and key stakeholders with a comprehensive annual report outlining how they fulfilled the governance roles, achieved strategic objectives and aspirations of the organisation, and sufficient financial information so that members can make a judgment as to how effectively the board is fulfilling its role.

Commentary and guidance
The system of governance should ensure that timely and accurate disclosures are made on all material matters regarding the organisation, including governance, financial situation and performance.
It is not appropriate that these reporting documents are delayed. It is the board’s responsibility to ensure the appropriate legal time frames are met.
Disclosure should include, but not be limited to, material information on:

  • any legally required information as per the relevant Act
  • the financial operating results
  • the entity’s strategic objectives and goals
  • members of the board and key management personnel, including board conflict of interest declarations
  • material foreseeable risks
  • material issues regarding employees and other stakeholders
  • governance structures and policies.

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Did you know?

Gold Coast 2018 is the 5th Commonwealth Games to be hosted by Australia.

Quick numbers

11.6 million Australian adults participate in sport or physical activity three or more times per week.
3.2 million Australian children participate in organised sport or physical activity outside of school.
$10 billion is spent annually by Australians on fees for participation in sport or physical activity.
17 million Australian adults participate in a sport or physical activity every year.