Form Follows Function - A Governance Discussion Paper for National and Provincial Sport Organization

Published September 1, 2006

It has been my observation that the business of amateur sport in Canada has become increasingly complex and sophisticated in recent years, yet the governance structures in place to lead amateur sport bodies have lagged behind.

Over the past several years, I have been invited by many national and provincial sport organizations in Canada to assist with governance reform efforts, in order to overcome this gap between governance and operations. For many of these projects, I found it helpful to prepare a discussion paper for the board and staff of these organizations to review in advance. Such a paper did not recommend options or solutions, but rather was intended to stimulate thinking in advance of meetings or workshops that I planned to hold with the leaders of these organizations.

This paper is a generic version of my governance discussion paper, and I am publishing it on our web site because I think it can be a useful reference for everyone.

Organizational models

Theorists of organizational development have studied sport organizations and have proposed three models to describe present-day national sport bodies . These models are insightful because they portray a continuum of change that will be instinctively familiar to those having a history of involvement in amateur sport. These models also reflect differing styles of governance in sport bodies in Canada.

The three models are shown below (this is adapted from the footnoted reference) [1]:

Many national sport governing bodies have recently, or are currently, engaged in efforts to make a transition from the Board Room to the Executive Office archetype. This parallels a trend in the governance of sport generally, which has witnessed an increased level of professionalism through the late 1980s and 1990s, an attempt to become more policy-driven and to separate the governance and management functions, and in some cases, a transfer of executive authority from volunteers to staff.

Governance changes in national sport bodies

In recent years several small as well as large national sport bodies have undergone governance changes, in an effort to be more efficient, accountable, responsive and policy-driven. The concept of a “corporate board structure” has held appeal for sport leaders, who for some time have been required to “do more with less” and strive to be more business-like in managing their affairs. In many cases, the traditional structure of a Canadian sport organization (typified by a large board that is representative of the provinces or geographic regions of Canada) has given way to smaller, leaner and more effective boards of ten members or less.

Recently, the Canadian Cerebral Palsy Sports Association has undergone a governance reform project. Using the maxim ‘form follows function’, a number of needs, wants, principles and issues were identified by the members of this organization and used as the starting point to discuss changes to board and committee structure.  A fairly cumbersome board of over 20 persons representing various provincial interests as well as individuals was redesigned to create a National Council, supported by three functional committees and two further councils representing provincial interests and athlete interests. Detailed terms of reference and operating procedures were prepared for each element of the new governance structure.

A few years ago, Swimming Natation Canada successfully completed a governance review that resulted in a transition from a 25-member, traditional representative board to a corporate board of seven directors elected directly from the membership. A unique feature of the new model is drawn from Australian Swimming, and involves each director being completely independent: upon election to the board, each director must relinquish all other roles or positions they hold in the sport of swimming. Along with changes to board structure, Swimming Natation Canada has also introduced standing committees that reflect a corporate approach to issues of policy, audit, human resources and succession. The executive committee has been eliminated.

Equine Canada (formerly the Canadian Equestrian Federation) has made a transition from an unwieldy board size of about 50 to a lean and powerful board of eleven. Formerly, the Board of Equine Canada contained appointed representatives from all geographic regions as well as from all equine sport disciplines. The new model abandons geographic representation and provides for elected representation from activity areas including the sport of horses, the enjoyment of horses and the business of horses. In essence, a much smaller group of volunteers comes from a much broader base and this has served to strengthen, rather than weaken the federation. This transition was not easy – an 11th hour negotiated compromise to secure support from provincial associations was the creation of a Presidents’ Council that elects two positions onto the Board.

Field Hockey Canada has gone from a traditional board structure of 21 persons to a small board of nine. The Board structure is similar to that of Athletics, where a larger share of directors are elected, while a smaller share are appointed by the other directors, once elected, to ensure that the required expertise and experience is contained within the Board. As with Swimming Natation Canada, there is no executive committee.

Many other national sport organizations have moved away from the traditional model to small boards of ten members or less (Basketball, Ringette, Fencing, Speed Skating, Curling, Freestyle Ski and Triathlon for example) and in some cases these are structured around sport disciplines such as in the sport of canoeing where the Board is organized around sprint, marathon and whitewater disciplines. The smallest board is probably that of Diving Canada (5 directors), perhaps the only national sport organization that operates more purely along the lines of the Carver model of governance.

Models of board structure

There are a number of different models of board structure. The following descriptions might assist sport leaders as they deliberate on ideal future governance models.

Boards may be small or large

• In my view a small board is a board having 12 members or less. Large boards have more than 12 members and may have as many as 30, 40, 50 or in the case of the Canadian Olympic Committee, over 75 members.
• As described above, many sport organizations are making the shift from large representative boards to smaller elected or appointed boards. According to Price Waterhouse Coopers “small boards of directors of the highest calibre with complementary skills and experience and a degree of independence can make for a more effective board than just sheer numbers of individuals”.
• It is my personal observation that small boards are more effective than large boards. This is due, in part, to the greater ease with which a small board can meet and communicate, and the higher degree of involvement and participation of board members in the work of the board. As well, small boards are less expensive to service and maintain.

Boards may be advisory, administrative-governing or policy-governing

• A board may assume an advisory role to the staff of the organization, may make and implement policy, or may establish policy and oversee its implementation by staff.
• The first model (advisory role) is common in the corporate world, and also exists among mature and sophisticated non-profit organizations that are managed by strong executives. Maturity and sophistication are linked to the age of the organization, the resources available to it, and the historic nature of its management and leadership.
• The second mode (administrative governing role) is typical among smaller non-profit organizations that have no staff or few staff. In this model, the board exercises a dual role of establishing policy as well as implementing policy through management functions. Usually, the board strives to keep these roles separate and distinct by fulfilling their management role through committees.
• The latter model (policy-governing role) is more common in medium-sized organizations, and exists where the board makes policy decisions, leaving policy implementation, management and administration to staff.
• Many organizations blend these approaches, where the board gives considerable deference to the executive staff of the organization, but on key strategic issues may have the final say. A blended approach works well where there is capable management and a high degree of trust among board members and between the board and management.

Boards may be representative or expert

• Representative boards are those boards on which the stakeholders of the organization, or the various interests that the organization serves, have representation. The typical example in amateur sport is the national sport organization whose membership comprises provincial/territorial sport organizations, each of which have one member on the board.
• Expert boards comprise individuals who have a position on the board by virtue of their expertise. Such individuals do not represent any particular interest but provide to the board their valuable experience, expertise and judgment, and their commitment to the overall mandate of the organization. Expert boards are appropriate for organizations having a narrow focus on a specific subject matter. The Canadian Centre for Ethics in Sport is an example of a sport-related organization that is governed by an expert board.
• In general, expert boards tend to be smaller than representative boards and are almost always appointed boards.
• There are also possibilities to combine expert and representative elements on a single board of directors.

Boards may be elected or appointed

• The truly democratic approach to board structure is to have the entire board elected by the membership. This is workable where the membership is comprised solely of individuals. Several national sport organizations such as swimming, field hockey and diving have implemented this model.
• Board members may also be appointed – this is more common where the “members”, or stakeholders, of the organization include other organizations.
• Very often, boards are a combination of elected and appointed members, reflecting the organization’s diverse membership structure of individual members and institutional members.
• Boards that are appointed often find that the public perceives them to be closed, insular and undemocratic. Boards that are elected may have difficulty attracting quality members who can bring the right skills and qualifications to their positions on the board. Often, board reform is motivated by a public perception that the board is “stacked” by insiders.

Board members may be institutional representatives or individuals

• Most boards reflect the membership of the organization. Where the organization’s members are other organizations, board members will tend to be representatives of those organizations and are expected to represent those organizations’ interests to the board. This can create significant conflict for the board member, who will try to be loyal to both the organization he or she represents and the organization he or she serves.
• Where the membership of the organization is individuals, board members tend to be individuals who represent no institutional interest.
• Some boards are a combination of individuals and institutional representatives. This would be the case of many national sport organizations.
• Lastly, some boards are made up of representatives of all the members of the organization. This means that the same people attend a ‘directors’ meeting’ as attend a ‘members meeting’. Interestingly, this is a common structure among sport organizations representing the disabled community.

Responsibilities of directors

Regardless of an organization’s governance structure, the responsibilities of a board and the duties of the directors of a board are fairly constant. These duties and responsibilities are set out in the legislation under which an organization is incorporated and this legislation is similar across the provinces/territories and between provincial and federal levels.

Legally, every director has a duty of diligence, of loyalty and of obedience [2]. It is the duty of loyalty that presents the greatest challenge to many directors on boards of national sport organizations, or on boards of multi-sport organizations, because the interests of the national or multi-sport organization must, by law, always take precedence over any other interest, including the interests of the association or group that the director may represent. Directors involved with more than one organization (provincial association and national association, or national association and multi-sport association, or even all three!) may find that they cannot be loyal to both and thus may find in the course of most items of business that they are conflicted.

The issue of independence of directors was very important to Swimming Natation Canada in their governance review.

Lessons learned from governance restructuring

Scholars on organizational theory have researched and written extensively about change within organizations. There are four main areas in which organizations can undergo change (these concepts are adapted from the scholarly literature to suit the sport context):

• Products and services - through the addition, deletion or modification of programs;
• Technology - using new methods and skills to deliver programs or enhance the knowledge base;
• People - introducing new ways that staff and volunteers think, act and interact; and
• Systems and structures – clarifying the functions of governance and management, and redesigning authority structure and control systems.

It is the fourth category, systems and structures, that is usually the focus of sport organization’s review of governance. It is also my observation that change in the first three areas (products and services, technology and people) cannot be effectively implemented without corresponding changes in the systems and structures that underpin the entire operation, including board design and committee structures.

Theorists also say that change within organizations is resisted primarily for four reasons:

• Self-interest – although all might agree that the organization as a whole will benefit from change, individuals may resist change because it will adversely affect their personal interests.
• Lack of trust and understanding – change is inherently uncertain and most people tend to fear uncertainty.
• Disagreement on costs and benefits of change - this usually flows from a lack of information or a gap in values.
• Cost – people may resist change because it takes time, money and effort over the short term, even though in the long term there will be financial gains.

All of these forces of resistance are likely to be encountered in any initiative to change the governance systems and structures of a sport organization. However, my experience as a facilitator in governance restructuring has shown me that the essential ingredient to successful change is trust. Like goodwill, trust takes years to build and a mere instant to lose. There may be a host of good reasons to make changes in an organization’s governance structure, but if trust is not there then the effort may be futile.

Substantively, it has been my experience that a major stumbling block for any organizational change within a national sport organization has been the issue of geographical representation on the board. This is the strong foundation upon which all national sport organizations have historically been built. National sport bodies that have moved to smaller boards have all eliminated provincial representation at the board – which has required that large groups of people make significant sacrifices.

However, the reward has been, in many cases, more responsive and more effective policy-governing boards whose focus is national and international performance. By designing an effective structure of active committees, improved communication and collaboration among provinces on technical and domestic issues can also be achieved.

Next steps

The purpose of this discussion paper has usually been to prepare people for a frank discussion on governance reform. In preparation for this discussion, participants are asked to consider the following:

• What are the motivations behind a review of governance – in other words, what does the organization need to do better or do differently, and can this be achieved by a different governance model?

• Are there best practices among Canadian sport organizations that the organization should embrace, in terms of board design, committee structure, and/or board/staff relations?

• Should organization pursue a small, policy governing board, with corporate-type committees? Why or why not?

Ideally, the result of this frank discussion will be agreement on motivations and desired outcomes, consensus on a preferred governance model or models, and a plan of action for moving forward on governance renewal.

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The phrase ‘form follows function’ is attributed to Louis Sullivan, an influential American architect associated with the Chicago School, and a mentor of Frank Lloyd Wright.

[1] Kikulis, L., Slack. T. & Hinings, C.R. (1992). “Institutionally specific design archetypes: a framework for understanding change in national sport organizations” International Review for the Sociology of Sport 27:343-370. Note that these authors did not research models of governance as part of the archetypes, and thus board types are not shown in the chart.

[2] Duty of diligence is the duty to act reasonably, prudently, in good faith and with a view to the best interests of the organization; duty of loyalty is the duty to not use one’s position as a director to further private interests; and duty of obedience is the duty to act within the governing bylaws of the organization and within the laws and rules that apply to the organization.

Originally published: Centre for Sport and Law website (September 2006)