Today, 31 October 2016, UK Sport and Sport England launched their eagerly anticipated ‘A Code for Sports Governance’ (Code). In short, the sport funding bodies have picked Halloween to set out their plan to ensure that, in future, there are no skeletons in the cupboards of English sport governing bodies (sorry).
The Code (available here), requires that ‘organisations which seek public funding for sport and physical activity must meet gold standards of governance’ and will be mandatory from April 2017 onward. Speaking at the launch of the Code, Simon Morton, the Chief Operating Officer of UK Sport, stated that ‘…The UK has been one of the strongest advocates for international sport to reform itself and to make sure that it’s fit for purpose. But we can’t do that if we ourselves are not aiming to be the gold standard… This is about walking the walk and this is about sending a strong message and leading by example.’
The Code is based around five key principles of good governance (Principles):
- Standards and Conduct
- Policies and Processes
Flowing from the Principles (which are not themselves mandatory), are a set of mandatory Requirements with which each organisation seeking funding must comply. The Requirements are intended to be applied to recipient organisations on a flexible and proportionate basis, dependent on the amount and frequency of investment they receive from UK Sport/Sport England. This is intended to reflect the fact that organisations receiving a higher amount of public funding must demonstrate higher standards of governance, in order to protect the ‘significant public investment being made’. UK Sport/Sport England has created three tiers of investment, each of which has a different level of mandatory governance Requirements.
For example, an organisation receiving more than £1,000,000 in total funding will be subject to the highest standards of governance Requirements (known as a ‘Tier 3’ investment). UK Sport and Sport England will look for a ‘… formal commitment from organisations [receiving a Tier 3 investment] to meet Requirements within set timescales’. At the other end of the scale, an organisation receiving less than £250,000 in total funding will be subject to the lowest standard of governance Requirements (known as a ‘Tier 1’ investment). This is designed to reflect the fact that though public funding must be protected, good governance must not create a ‘disproportionate administrative burden’. In between Tier 3 and Tier 1 investments lie Tier 2 investments which cover ‘… a vast range of investments and as such the difference between the mandatory governance Requirements at Tiers 1 and 3 is significant’. Organisations who receive Tier 2 investment will be expected to comply with all of the Tier 1 Requirements and some of the Tier 3 Requirements but the exact proportion of Tier 3 Requirements (and the timeline for the organisation’s compliance) will depend on ‘…the nature of the investment and the circumstances of the organisation’.
Coverage of the launch has thus far has focussed on the Requirements (for Tier 3 organisations) relating to: (i) gender diversity – organisations must ‘…adopt a target of, and take all appropriate actions to encourage, a minimum of 30% of each gender on its Board…’, a target which (sadly) may be difficult for many organisations to achieve, and (ii) the ultimate decision making body – organisations must ensure that the ‘…Board of the organisation shall: be the ultimate decision-making body and accordingly exercise all of the powers of the organisation…’, this is an organisational change that, reportedly, The FA has repeatedly resisted.
Interestingly, the Code does not: (i) set out the specific timescales within which organisations receiving Tier 3 investment must comply with their Requirements, nor (ii) the consequences for failure to comply with the Code’s Requirements (regardless of the Tier of investment). The Code does, however, indicate that separate guidance will be issued in respect of how UK Sport and Sport England intend to ‘… apply, monitor and assess compliance with the Code, and the implications of non-compliance’. Early reports following the launch indicated that continued non-compliance with the Code’s provisions may result in the Government (as opposed to Sport England or UK Sport) refusing to provide financial backing for organisations seeing to stage major events in their respective sports. If correct and in the event that organisations fail to comply with the Code’s Requirements, such a sanction could have a significant impact on the number if major sporting events held in the UK.
Undoubtedly, the Code heralds a new era of sport governance in the UK. It will necessarily require governing bodies and other sports organisations in the UK to reflect, challenge and build upon their existing governance standards, should they wish to continue to receive public funding. Provided adequate support is available and a suitable timeline for implementation is provided in due course, the Code could become the gold standard for sports governance on a global basis.