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Sport Governance Principles

Principle 4: The players

a diverse board to enable considered decision-making

Principle

A board should be a diverse group of people who collectively provide different perspectives and experience to facilitate more considered decision-making.

Benefits
  • Better decisions are made by the board due to a more robust debate informed by diverse perspectives.
  • Diverse boards can help attract new participants to the sport by highlighting opportunities the board may not have considered.
  • Succession planning can help prepare a board for a smooth transition between directors and retain corporate memory.
  • Boards can make better decisions because they contain a mix of elected and appointed directors and can balance institutional knowledge with fresh perspectives.
  • Boards can draw on ideas and insights from other sports or industries during the decision-making process.
Questions to ask
  • Do we have diversity in age, gender, cultural and linguistic background, and geography on the board?
  • How do we ensure our board has the skills needed to implement our strategy and provide effective oversight to achieve our vision?
  • Are all our directors representing the organisation and its interests and not acting in favour of personal or other interests?
  • How do we promote vacancies to actively seek diversity of directors?
  • Does the director nomination, appointment and election process consider diversity?
  • What opportunities exist to bring diversity to the leadership of our sport (e.g. committees or workgroups)?

What should a good board look like?

Boards are best able to fulfil their roles and responsibilities when the directors have a diversity of skills, perspectives and backgrounds and a culture that values this diversity. This diversity of perspective means the board is more likely to consider different options, risks and implications leading to more informed decision-making.

The differences in size and capability across sporting organisations means there is no single formula for how a board should look. Each organisation should aim to have a board which reflects its needs and goals. Some areas of expertise will be generic to all boards (e.g. finance, law, governance) while other expertise will be more dependent on the strategy of the organisation and the skills and experience it needs to execute the strategy at a particular time (e.g. digital transformation or high performance). Board composition should also consider gender, age, and cultural and linguistic background, as well as geographic location, independence from the sport and professional background.

How do we get the ‘right’ people on the board?

The priority in board composition is building the best board, not assembling a group of the best individuals. A narrow focus on who would be the ‘best’ director can lead to missing out on the ‘right’ director. Good boards will have a mix of elected and appointed directors. Elected directors are selected by the members through a voting process while appointed directors are selected by the board. A robust nominations process, with a nominations committee where appropriate, has an important role in supporting and educating members to understand how the skill and background of the nominees for election will contribute to the board’s functioning and achievement of the strategic goals.

What are some red flags?

Within a sport, directors should only sit on the board of one organisation at a time. That is, an individual should not be on a state and national board of the same sport. Furthermore, while experience within a member body can be a valuable perspective, this experience in and of itself does not mean an individual would be a suitable director. It is also recommended that an ex-CEO should not become a director for at least three years to allow a new CEO the autonomy to take on the role.

Example behaviours and actions

Board
  • Should decide who would be the right person to chair the organisation
  • Consider the recommendations of the nominations committee when appointing directors
  • Discuss and arrange for succession planning for directors and the CEO
Directors
  • Actively encourage fellow directors to contribute to boardroom discussion and ask questions
  • Provide accurate self-reflection about their skills and experience
  • Disclose actual, potential, or perceived conflicts of interest
  • Consider the skills and diversity needs of the board when appointing directors
  • Regularly discuss contingency plans for the CEO’s departure or prolonged absence
Organisation
  • Appoints potential future directors to committees to upskill and prepare them for a board position
  • Identifies the skills needed for directors based on the strategic plan
CEO
  • Regularly discusses contingency plans for extended absence with the board
  • Actively engages in conversations regarding succession and succession planning with the board

Recommendations

A set of good practice suggestions, which should underpin the Board’s considerations in applying this principle.

The board should regularly conduct skill and composition evaluations and act upon these findings.
The board, while ensuring the prevailing criterion for election is eligibility, skills, expertise and experience should be composed in a manner such that no gender accounts for more than 60% or less than 40% of the total number of directors.
The board should elect its chair from among the directors.
A nominations process, which may be led by a nominations committee, should be used to independently assess and review the skill and capability of the board and identify the right directors for any vacancies.
All directors should be independent.

Resources and tools to help

Below are some resources to assist with this Principle. For guidance, or to discuss how your organisation may best implement good practice in this area, please contact your state or territory agency for sport and recreation. For NSOs, email your query to SportsGovernance@ausport.gov.au and a consultant will contact you.

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