Code for Good Governance

A Charter for Sports Governance in the United Kingdom (Charter) has recently been published with the new Code of Governance (Code) due to come into effect in 2017.  The Charter outlines some of the main themes to be covered by the Code which aim to help ensure that the highest levels of governance exist within sporting organisations across the UK.

While governance in the publicly funded sport sector in the UK is already at a good standard the Code, being drawn up by UK Sport and Sport England, will build on this further.  It will be ambitious and set high expectations for any sports organisation that wants to be in receipt of public funding.  The aim is that this will not only protect that investment but also help good organisations become exceptional.

The Charter includes 9 key themes that will form the basis of the Code:

1. Transparency

Organisations must be clear to both stakeholders and the public about why they exist, what their strategy is and how they are structured.  Organisations in receipt of public funding will be required to publish an annual governance statement setting out how they have complied with the Code.

1. Integrity

Organisations must demonstrate that they have adequate measures in place to ensure those leading them maintain the highest standards of integrity.  Senior officeholders (e.g. board members, trustees, chief executives) will have to sign a declaration stating that they are of ‘good character,’ defined through the use of objective criteria, and that they have the skills and experience for their role.

1. Financial probity

Organisations must be fully accountable for their use of public funding, accounting for every penny and demonstrating how it has been used to achieve the purpose for which it was given.  Larger organisations will need to have their accounts independently audited and make available to the public

1. Leadership and decision-making

Organisations must have fit-for-purpose boards.  The Code will look to build on and in some cases re-state existing requirements such as term limits and the size of boards.

1. Membership

Organisations with membership bases will have to ensure that healthy democracy exists.  Consultation will be undertaken in the future to identify how governing bodies should best engage with their members.

1. Independence of thought

The Code will require organisations’ decision-making bodies to include a sufficient number of people who are free from a close connection to the organisation and who can provide constructive challenge.

There will be a consultation on increasing independence on boards which will include looking at whether the existing requirement of a minimum of 25% of independent board members should be increased, as well as looking at a possible new requirement for independent chairs.

1. Diversity

Organisations must have diversity in their leadership, decision making and throughout their workforce.  They will be required to publish an annual report explaining the steps they have taken to address this.

For larger organisations, the target for women on boards (or men where they are the underrepresented group) will increase from a minimum of 25% to 30%.

There will also be a consultation on the introduction of other specific targets (including for BAME and disability representation on boards) and guaranteed interview schemes for under-represented groups.

1. Culture

The Code will also look to ensure that there is a good organisational culture in sports organisations to help them achieve optimum performance.  While the Charter notes that culture is driven by the leadership it is not clear what requirements the Code will place on organisations. The Charter suggests that the development of diagnostic tools to help organisations understand and measure culture may a means of addressing this objective.

1. Sport England and Sport UK Commitments

Sport England and UK Sport will work together to support sport organisations that want to be eligible for public funding to achieve the requirements of the Governance Code for Sport in the UK.  They will also look to develop assessment criteria to measure ‘good governance’ and reward organisations that ‘demonstrate a robust approach to governance and evidence of continuous improvement’.

The impact of these changes will be clearer once the Code is finalised in 2017.  What is clear is the tone of the Charter – “public funding is a privilege and not a right”.  The implication is that organisations will have to show that they are adhering to the requirements of the Code if they expect to receive public funding.  Once the Code is finalised it will also be clearer what the expectations will be for smaller organisations.  While Sport England and UK Sport have promised to support organisations in their endeavours to achieve the requirements of the Code, it is not clear what support they will offer small organisation to address the difficulties that increased administrative burdens can place on them.

If you have any queries on what the changes will mean in practice for your club, please call our dedicated County FA Helpline on 08448 240 432 or email [email protected].