Sports gold - and not at the Olympics

The boardroom turmoil at New Zealand Rugby League in late 2007, which included an intended leadership coup, the dramatic resignation of the chairman and three respected independent directors, suggested significant dysfunctionality equal to that of The Simpsons. The need for a board providing insight, oversight and foresight through a balance of independence of thought and collective responsibility could not have been more clearly demonstrated. It prompted Sport and Recreation NZ (Sparc) to register concerns about the sport's health and request a complete review of the organisation, with future funding contingent on the review and implementation of the outcomes.

A balanced board needs a broad mix of skills, including industry knowledge complimented by generic strengths such as policy, government, commercial, marketing and legal skills. Each member needs to demonstrate independence of thought and contribute not only within but also outside his or her own areas of expertise. Constructive questioning and robust debate are the hallmarks of a diligent board which, under expert chairmanship, reaches collective agreement and continues to move forward. A further requirement of a value-adding board is its ability to refresh its directors periodically while preserving the ideal mix of well-developed professional and business skills.

In the sports world, the consequences of management incompetence and neglect can be poor elite performance, reputational damage, declining participation and loss of supporters, funders and sponsors. More than 100 national organisations deliver sport and recreation opportunities to New Zealanders, with 10,000 clubs at a local level supported by about 500,000 volunteers. Over the decades recreation and sport, for a long time central to New Zealand society, has steadily moved from a volunteer weekend activity to a blend of volunteer and commercially driven businesses with an annual real gross output of more than $2 billion.

Any successful organisation needs to acknowledge, accommodate and deftly juggle the needs and expectations of such a diverse constituency. However, a 2001 Ministerial report identified growing evidence that this was not happening.  A picture emerged of a fragmented sector, lacking in co-ordination and leadership, and Kiwis who were not getting enough exercise. Clearly, something needed to be done. Sparc was created in 2002 with the broad mandate “to promote, encourage and support physical recreation and sport in New Zealand”. Three key areas of immediate and long-term focus were identified: participation in sport and recreational activity to get Kiwis off the couch; high performance programmes to nurture winners; and sports systems to deliver these outcomes. Government funding was increased from $2.5million to $69.5 million.

A 2003 Sparc study of 26 organisations found that many had complex, antiquated and irrelevant governance structures and often failed to deliver. And though most board members were well-motivated and some were of exceptional quality, many had little or no governance training. Many boards did not have the right mix of skills and experience, individual directors often represented narrow stakeholder perspectives rather than the organisation as a whole, and not enough attention had been paid to playing as a team.

Sparc encouraged best practice by providing resources and training to ensure that governance systems were appropriate. This included advice on board selection and composition, board charters, setting and measuring performance expectations, effective partnering with management and how to ensure boardroom debate focused on strategy rather than operation.

An independent review recently praised Sparc for lifting the bar in terms of its own performance and across the board in sector capability.

There will always be debate on sports funding, particularly when some is from the public purse. Perhaps the last word should be from Sport Minister Clayton Cosgrove, who was correct when he said recently that “without investment in governance structures and management skills, funding sports and recreation is like pouring money into a black hole.”