This is a Sport Australia podcast production.

Kate Corkery: Hello and welcome to the Sport Governance Podcast series. My name is Kate Corkery and I am the Director of Sport Governance and Strategy at Sport Australia. Over this series, we will take a deep dive into the sport governance principles and how they come to life in practice. Each podcast will focus on an individual principle with a special guest joining me to share their experiences and practical advice with respect to that principle.

In today’s episode we are focusing on Principle 4 – The Players. A diverse board to enable considered decision making. Principle 4 highlights that a board should be a diverse group of people who collectively provide different perspectives and experience to facilitate more considered decision making.

We are privileged to be joined by Pippa Downes to discuss this critical principle. Pippa has over 25 years experience in global financial services in Australia, Asia and the US. Pippa was a managing director of Goldman Sachs in Australia for over six years. Pippa is a commissioner of the Australian Sports Commission and is a director of Australian Technology Innovators ZIP Co., ALE Property Group and Ingenia Communities Ltd. Pippa is a former director of Swimming Australia and Sydney Olympic Park. Pippa is also a dual international athlete, having swum for Australia and represented Hong Kong in the rugby sevens. Hello, Pippa and thank you for joining me to discuss this significantly important principle that underpins good governance.

Pippa Downes: Thanks, Kate. I'm delighted to be with you today.

Kate Corkery:  So let's start with benefits. What are the benefits of diversity to a board?

Pippa Downes: Well, look, I think the research is very clear that when you have a diverse board, better decisions are made and you're less likely to miss things. So, you know, then if you have a group of like minded individuals and the role of the board is so critical in setting the strategy and for an organisation that you really can't afford to have a sub-optimal board. So a diverse group of people is really the only way to go.

Kate Corkery: And when we talk about sport, quite often matters relating to conflict of interests come up in terms of diversity. How is that played out for you?

Pippa Downes: It's very interesting, right? I mean, when you're on a board, you have a duty to the organisation to do the right thing. And I think what I've sort of encountered through some of my dealings with sports governance is people come onto the board and they come with their little patch that they feel like they're representing. But when you come onto a board, you need to leave that at the door because you're trying to represent the sport as a whole. And I think sometimes people miss that they have a fiduciary duty to the whole sport and the whole organisation, and they're not in there batting for their little patch. So everybody has to be doing what is in the collective best interests of the sport, not what perhaps they're, you know, where they came from. So if they're a coach, for example, if they're a high performance athlete, you've got to look at the big picture when you're on a board. And I think sometimes people don't quite understand that. And I think, you know, there are conflicts that arise. I've seen it myself. And sometimes that comes because people don't understand the duties of a director. To act in the best interests of the whole organisation. But I think that comes through education. And I think, you know, I think increasingly people do understand what a conflict is. And if it sort of smells like it, something might not be right, there's probably a pretty good chance there's a conflict going on.

Kate Corkery: We have conversations about the importance of elected directors and the importance of appointed directors. How does this inter-relate with a principle around diversity?

Pippa Downes: I think one of the lessons that I certainly learnt when I was on the board of Swimming Australia, one of the problems we had with the Federated Models is that the elected directors, like any politician frankly, I think there's a reason why elected politicians generally are continually rate quite low in the public's perception of them, rightly or wrongly. Because they are seen to be making short term decisions for the electoral cycle. I think, you know what I certainly witnessed in the swimming world when I was on the board many years ago, is that some of the directors were scared to make some of the the right decisions because they were worried about being elected. And that's the beauty of the independent directors who can come in. Often times they may or may not like obviously I was very involved in swimming but I hadn't been around the sport for 20 years. So I was able to come in with a very fresh perspective. I hadn't been involved, so I didn't have sort of a preconceived notion about what the right ideas were for the sport. I think what you can find, the people that been involved in the sport for so, so long, they sometimes may lose the perspective. I mean, the world's rapidly changing and sports also need to adapt. Like companies have to adapt. If you don't adapt, you die and you end up out of business. And unfortunately, sports are in the same way. I mean, we've seen it this year with COVID just how quickly we've seen the professional sports having to lay off people and adapt their operating models. So you need to be able to do that. You need to have a fresh perspective. Independent directors have that ability because they don't have to face the members, I guess, for a certain period, which gives it a little bit of flexibility to be able to sort of make those long term decisions that may not be popular but, you know, as we know, sometimes you do need to make decisions that might not be popular in the short term but there are obviously the best interests of the sport in the long term. I think a lot of sports are learning, just in the last nine months with COVID, that sometimes you've got to make some tough decisions to keep the sport liquid. You know, when when sport stopped and membership fees didn't come in. You know, it's been a very tough time for sports. Volunteers haven't been engaged and that forces, you know, decisions and strategic decisions that the board have to make. That sometimes, perhaps some parts of the sport may not be happy with but ultimately, the board has to make the best long term decisions that are in the long term interests of the sport.

Kate Corkery: Indeed, and I've certainly had many discussions with directors over the last six or nine months about the fact that they came on to a sport board because they wanted to see it thrive. They never expected that they would be in conversations about it collapsing. And that's certainly been a bit of a reality check for a lot of our directors on sport boards over last six months. What attributes create diversity on a board?

Pippa Downes: Diversity comes in many different forms but ultimately, I think you need people with diverse backgrounds and perspectives for a start. I think you need people with diverse experiences, a life experience and sport experience. So, for example I don't think it's valuable to necessarily have, for example on a rugby board have 10 guys that used to play rugby because, you know, let's face it, they're going to have a quite similar perspective. So I think, you know, having very different perspectives is valuable. I think having diverse backgrounds is very valuable. So, for example, you know, if I think of say some about the sport of cricket, you know, it's a very popular sport in some of the southern Asian parts for the Australian community. And, you know, if you're thinking about participation, you know, it would be wise to want to have the viewpoint of some of the people from that community, I would think. And you obviously need diverse skill sets both educationally and what you bring to the table, because, as you know, different boards at different times need different skills. But you need the greatest amount of perspective to make sure you don't miss anything. And that's the beauty of a diverse board. And you can have robust discussions with everybody asking different things. And, you know, sometimes it's great to have people that have a completely different perspective, because I think what happens if you've got people, too many people that have got the same perspective, sometimes the big questions don't get asked the sort of 'elephant in the room' type questions or the dumb question, which somebody who's not as close to it might say, well no actually, why are we even doing that, which might be for people that have been too close to it, perhaps for many, many years and are very entrenched in their views, might not be able to see. And that's why it really helps to have a whole lot of different people attacking a problem from different angles.

Kate Corkery: So if you're looking for these different people, you're out there, you've got a board, you recognise you need to diversify the directors either for age or gender or cultural and linguistic background, how do you go about doing that?

Pippa Downes: Well, look I think for all boards to be effective, they need to really understand at any given point what their big challenges are and what the sort of basic skills that they need to be a high performing board. And so, you know, I think it's a given that you probably need people that are financially literate particularly sports are in some challenging times financially. So financial expertise is almost a given. But depending on where the sport is in its lifecycle, the particular challenges they're facing, you may want to beef up your skill sets in particular areas. So, as I said, if there's financial difficulties, having some accountants or experts helping you navigate that or beefing up in that area might be wise. If a sport is desperate for looking for a sponsor and trying to raise its profile, because at the end of the day, it's a dog eat dog world out there in the sports world trying to compete for dollars. So maybe you might want to get some marketing people with some of that skill to sort of assist the management teams to do that. So the board isn't there to do the job of management but it's certainly able to counsel and advise. You might have, you know if you're going through tough times, you've got to look at how the organisation needs to change in a tough environment, having people that are management consultants or people with HR backgrounds might be able to assist. Technology is obviously a very big one. So I think increasingly sports need to compete and connect with their members and technology is the enabler in that space so having somebody with that background. But I think really you need to have a skills matrix set up to make sure you know what you've got. Look at the you know, look at the people you've got on the board or work out where your holes are and that's absolutely critical to make sure, again, that you don't miss stuff because a diverse board needs to be able to cover all its bases, or at least if they don't have it, know that they don't have it may be able to bring somebody in from the outside to assist on some of the more tricky issues that they're facing.

Kate Corkery: Absolutely. And you have the board skills matrix to identify all those gaps in terms of skill and personal qualities on the board. You then find yourself in a position where you've got a nominations committee to oversee the election and appointment of directors. Talk to me about the change in the sophistication impact of nominations committees in sport over the past couple of years.

Pippa Downes: Yeah, look, I think there's been some really good work that's been done in sports like tennis that have really tried to sort of, I guess have that lens about what the board really needs. What the sport really needs. And in a sort of almost a dispassionate way to say listen right now we need skills A, B and C. And so really, if we're filling some spots on the board, this is our immediate need in the next one to two to three years that we really need to beef up our skills in that area. And that way they can look at the candidates that are coming through and sort of almost sort of vet them to say look these people can add that value to the board because we're always trying to enhance the quality of the board by beefing up the skills. I mean, that's how I mean, it's like an athlete and if an athlete wants to be successful, they've got to train hard. They've got to cover all their bases. If they've got a weakness, they've got to work on it. And that's how you excel. And that's how our athletes are high performance athletes. That's how our coaches learn. And boards have to do the same thing to understand where they're a little bit weak, how they can fill the gaps to, you know, be able to assist the greater sport moving forward.

Kate Corkery: And is it important that the voting members understand the value and the importance of the nominations committee process in terms of ensuring ultimately as the people with the power of the vote, the candidates who are not suitable for the needs of the diversity of the board at any time?

Pippa Downes: Well, look, I think it's absolutely important to connect with your members. I mean, you know, sports are run for the members. And there has to be absolute transparency but for the boards and the members to understand the process and why the boards are doing what they're doing. And I think the minute you know boards are not clear about what they're doing or the boards are not listening to their members or even, you know, there's a lot of governance reform going on now where the members you know frankly, sometimes they don't even have a say. And I think that's problematic. So ultimately the boards are there to help the sports and its members, not the other way around. So it's critical that the members understand the process, why it's happening, be absolutely transparent about the skills that they're looking for at the time so they can understand the appointments or they can understand the type of candidates that have been put forward to them to vote for. And ultimately it's the responsibility of the chair and the board to make sure that is transparent to their members so there's no backlash through that process.

Kate Corkery: You've just mentioned the chair and the chair is another position on the board which modern good governance has sort of adapted in terms of its appointment over recent years. And one of the key good governance concepts now is around the board appointing or electing the chair from amongst the directors. Why is that so important?

Pippa Downes: That's absolutely critical. I mean, the chair is apart from the CEO of the organisation, the chair is the most important person. You know, they are ultimately the conduit between the board and the management team and the CEO and they are the ones that run the meetings and optimise the discussion and the strategy coming out of that board. And it's a skill. I mean, being a good chair is a skill and a good chair will ensure that everybody around the table gets heard that they don't impose their own views on the room and that they're listening to everybody. And that's, you know, when you have a diverse board, which is what we need to be successful, a good chair is very skilled at doing that. Now, I have experience absolutely the opposite and sometimes I know when I was on the board of swimming there was a member elected chair. Now, sometimes that just doesn't work. I mean, you really know the directors and know who is the person that probably is best placed to have that integrity to run the board meetings and to optimise the work of the board and I think it's absolutely critical that the directors are the ones that nominate that because the members they don't have that, if the members elect their directors, they need to have that trust that the directors can choose who it is appropriate to run that and do that optimally.

Kate Corkery: One of the key issues that we faced in good governance, not just in a sports sector but across the corporate sector, the not for profit sector, is women on boards and they are obviously a fundamental input into good decision making in terms of diversity. In 2015, Sport Australia applied a target of women NSO boards and that target was 40 per cent representation and despite that target being in place now for five years, we're still not hitting it. And in fact, worse than that for the 68 funded national sporting organisations, the gender balance is actually only 34 per cent and has declined by one per cent over the past four years and only 18 of our chairs are female which is 26 per cent. Why do you think that is?

Pippa Downes: Well look I think historically, you can't get away from the fact that sport and most businesses have been run by men. But things have changed radically in the last few years, particularly in sport, with the participation of women. So it's obviously critical you're not going to have a diverse board making good decisions if half the population are missing from the seat at the table. So I think, I don't know but there's still a lot of work to be done. Unfortunately I think some people are involved in boards, you know some people love their sports, everybody loves their sports. You'd hope that they're involved for the right reasons. But sometimes people want to be with people that they're comfortable and familiar with. Perhaps they don't know the women some of these boards are very political, as we know, unfortunately and sometimes people lose sight of why they're there and the purpose of the board and whose interests they should be looking out for which of course is the best interests of the sport as a whole. And maybe some women get a bit sick of it or they're not as interested in the politics because they want to work more collaboratively and, you know, sometimes people end up being a bit too close to the sport. And I've seen that. I've got firsthand experience of people who I'm sure anybody on a sporting board knows where people are in it, potentially not for the good of the sport, but for power or whatever reason, or they're just you know, they're so they're so close to it sometimes that they lose sight of why they're there and perhaps people sort of who are there for the good of the sport, you know, get disheartened and I know I certainly know that was sort of my experience a few years ago at Swimming Australia and others but it's so critical for the sports that we get as many people involved from as diverse range from the volunteers, to the coaches, to the participants. I think re-engaging with the alumni of the sport and ex athletes once they've, you know, been a successful athlete, often go on to have a different career and then they come back to the sport or maybe their kids start playing the sport. And I think having those people that have the love of the sport at their heart, maybe they're not as attached because they haven't been involved in sort of the day to day politics for the last sort of like 10 or 20 years. And, you know, sometimes people don't appreciate sometimes it's time to walk away. You know, you've got to let other people have a go. People can, all of us get very attached to our views and that's human nature. So sometimes I think it's important that people step away from the sports to give other people go, to get fresh perspectives on how the sport should be run. And you shouldn't have entrenched people running sports forever and a day because I think unfortunately sometimes they sort of lose sight of why they're there and moving forward and that's why you always have to have diverse, fresh thinking to make sure you're always looking forward about how to adapt into the new world.

Kate Corkery: So you've highlighted there the ways we can promote vacancies to actively seek diversity of directors. You've spoken about re-engaging with alumni of the sport, using networks, not being afraid to reach into professional community organisations and businesses. The other opportunity that there is and highlighting this for our listeners is Sport Australia actually has a national Director Register. You can register your interest to be on sport boards in Australia and when sport board positions are advertised, we push that out to those who fit the criteria on our register and that's a really great opportunity for us to identify and communicate with people who are interested in being on sport boards and feel like they've got a particular skill set or capability to offer.

Pippa Downes: Absolutely you think about how many participants in sport, who loves sports, who go off and, you know, enter into whatever career they choose, who have got a lot of knowledge, a lot of passion, who want to funnel that into the sport just because they love it, like me swimming gave me a great opportunity to travel to get a college education in the US so I want to give back to the sport and there's you know, hundreds of thousands of other athletes similar to me or perhaps their kids are playing a sport and they want to make sure that that sport is well-run. They can see things that probably need to change from their perspective. And they may have a very different perspective from a participation perspective watching their kids than sort of an elite high performance lens and, you know for sport to be firing on all cylinders, you've got to get the pathways right, you've got to get the participation right, you've got to get the elite and that's why having a diverse perspective and lots of different people who are looking at the sport from different angles is the way you make sure you don't miss anything and it's thriving.

Kate Corkery: Pippa, thank you so much for joining me on our SportAUS podcast, exploring Principle 4 -The Players.

Pippa Downes: My pleasure. Kate.

Kate Corkery: If you'd like to access a copy of the Sport Governance Principles, you'll find them at the SportAUS website sportaus.gov.au/governance. If you have any feedback or questions, please email us at sportsgovernance@ausport.gov.au. My name is Kate Corkery and I look forward to you joining me for the next podcast in the Sport Governance Series.