Lately it seems our website postings are preoccupied with governance and social media – whatever happened to the sport and the law? The reality is, the law remains at the root of almost everything we do as sport administrators and sport leaders. There is no escaping it. Whatever it is – organizing competitions, high performance planning, selecting athletes for carding or for teams, staffing your office, structuring a sponsorship deal, creating partnerships with other entities, contracting outside services, convening your annual general meeting, sending national teams abroad – if you get it wrong, there will most likely be legal consequences.
Governance is no different and has a strong legal foundation. And National Sport Organizations (NSOs) are right to turn their mind to governance these days. Some organizations are beginning governance reviews, while others are embarking on strategic plans that include a governance component. This is prudent, given that new legislation is coming that will require all NSOs to make some changes to their governance structures, and will require some NSOs to make significant changes. As a result, we are in discussions with many NSOs about the new legal landscape for federal corporations. These discussions inspire me to share some of my more recent reflections on sport governance.
This is the definition of governance that I have used at the Sport Law & Strategy Group over the years: Governance = the systems and structures an organization uses to control its general operations, programs and activities. But I have learned that governance is more than just mechanics, and this bare-bones definition needs to be enhanced: Governance = the systems and structures an organization uses to control its general operations, programs and activities. These systems and structures make it possible to: hold a board of directors to account, promote fairness and transparency, support stewardship and integrity, and engage stakeholders. Governance systems and structures provide the means by which organizations make decisions, pursue mandates and goals, deliver programs and services, and meet legal standards.
The IOG (Institute on Governance), a Canadian non-profit think tank on governance issues, says that there is no one theory or model of governance that is better than another. Rather, they prefer to support organizations in finding a purpose-based approach to governance that works for them. When I am asked to suggest best practice models of sport governance, I hesitate – the model of Hockey Canada works for them because of their financial strength, personalities and organizational culture. In contrast, the model used by Diving Plongeon Canada (which is far removed from the Hockey Canada model) works for them as a highly specialized, boutique sport with collaborative technical and administrative leadership.
The IOG recommends that governance reviews and reform should start from a set of principles, and suggest these as a reference point:
- Legitimacy and Voice – the governance system inspires confidence in both its process and results, and provides adequate voice to members and stakeholders. Decisions are based on a consensus orientation (note – this does not mean that all decisions must be reached via consensus, but this is what is strived for).
- Performance – the organizational system performs well, leading to sound decisions that are responsive to the interests of members
- Accountability – the system allows members to hold their decision-makers to account (and to turf their directors out of office if they are not accountable and responsive)
- Direction – governance processes and structures provide a clear strategic direction for the organization
- Fairness – all members and stakeholders are treated fairly and impartially
These principles make perfect sense and work for everyone. However, my experience is that when we undertake to review governance models, we tend to focus on the physical and tangible elements – the structures and procedures. In other words, we are preoccupied with the governance architecture as opposed to substance and purpose. At the end of the day, the main attribute of a successful and effective board is its board culture, not its architecture. Organizational culture is much harder to change than organizational structure. This suggests that successful governance reform requires a change management approach, careful and patient facilitation, engagement and input of members and stakeholders, and clear communications.
There are lots of written materials available about governance in the non-profit sector (or as we like to say, in the social profit sector). Although it is now 13 years old, the report authored by Ed Broadbent in 1999 on improving governance in the voluntary sector stands the test of time (Building on Strength: Improving Governance and Accountability in Canada’s Voluntary Sector). This report describes the active oversight of organizational governance by a board of directors as stewardship. According to Broadbent, effective board stewardship involves eight key tasks:
- Steering the organization toward its mission and guiding strategic planning
- Being transparent, including communicating to members, stakeholders and the public and making information available upon request
- Developing appropriate systems and structures
- Ensuring the directors understand their role and avoid conflicts of interest
- Maintaining fiscal responsibility
- Ensuring that an effective management team is in place and overseeing its activities
- Implementing assessment and control systems, and
- Planning for the succession and diversity of the board.
Still wise advice today.