Today, on 2 January 2014, the board of the Welsh Rugby Union Limited (WRU) met to discuss the next stage in their attempt to reach agreement with the four professional teams they put forward to compete at the professional level of the game of Rugby Union. On the 31 December 2013, the professional sides represented by Regional Rugby Wales (RRW) declined the opportunity to continue their participation agreement with the WRU for the next 5 years.
On 1 January 2014, the Chief Executive of one of those four teams, Gareth Davies, challenged the WRU board to carefully consider at their next meetings whether the route of non-negotiation with RRW as laid out in their press release of 31 December, was really the route that they wished go down.
Effectively, he was asking the board of directors to challenge the executive directors, led by Roger Lewis, to justify the actions that were being done in their name.
So who are the board of the WRU, and what should be their role and composition?
We will firstly look at the role of the board.
It is accepted that good corporate governance in public interest entities such as sporting bodies, and that the work of the staff at such bodies (including the Chief Executive) is monitored and controlled by an effective board of what are termed ‘non-executive directors’.
In other words, directors of the business that have no day-to-day involvement in the business. The Institute of Directors (IoD) state that the non-executive director’s (NED) role “is to provide a creative contribution to the board by providing independent oversight and constructive challenge to the executive directors”.
In terms of composition, the UK government recently put their name to a set of guidance rules for sport and recreation boards, such as the WRU. In section 4 of this guidance they outline the following (amongst other points):
– Bodies should have a board of no more than 10 members
– The board should have at least two independent NED’s bringing knowledge and experience from outside the sport
– Ideally should have an independent Chair to bring an objective perspective
– The board should be chosen on the basis of their competence, ability, quality, leadership, integrity and experience
Let us look at three comparable bodies and the composition of their boards.
The Scottish Rugby Union has a board of nine members. One of these is an executive director. Of the other eight, two appear to be completely independent NED’s, including the chairman. The Chairman is a former CEO of First Group PLC, and the other independent NED is the UK CEO of Deutsche Bank. Of the other 6 NED’s, one is a former rugby player who is a specific NED appointment and the other 5 appear to be elected. Of those 6 though, there is an entrepreneur, a Chartered Accountant, and a CEO of a listed company.
The Rugby Football Union (RFU) has a board of 15 members, including three executive directors.
They have 3 independent NED’s, who all current hold senior appointments at businesses, for example, a large law firm. Of the other 9 directors, many have held, or do hold, senior positions in a variety of businesses.
The English Football Association (FA) board is made up of 12 members. One of these is a staff member, the General Secretary. There is an independent chairman, who is a former Director General of the BBC, amongst other appointments. Of the other 10 directors, 4 are elected from the grass roots of the game, 4 from the professional game, and 2 appointed NED’s. One is a barrister and local authority CEO, and the other is a former executive director of Hilton International and Ladbrokes.
So, how does the WRU match up against these? Who actually sits on the WRU board?
There are 18 directors, only one of whom is an executive director. That is Roger Lewis, the Chief Executive Officer.
There is a chairman, David Pickering. He is not independent, as shortly before being elected as Chair in 2003 he was employed by the WRU as Wales team manager. His business experience is somewhat unclear.
Another two directors sit as a ‘National Representative’. One is Gerald Davies. Whilst he has a healthy business background, his independence could be questioned due to his previous rugby career. The other is Martin Davies. Whilst being a Chartered Accountant, he does not seem to have experience at a senior level in a large business, according to the WRU website.
If the WRU claim that the ‘National Representatives’ are the equivalent of an independent NED, then I would question their independence. The skills and expertise of the other National Representative do not appear to be as strong as the comparable bodies laid out above.
The other 14 directors are elected by WRU districts. Not one of these directors has any senior business experience. Many are retired, and worryingly, 6 of them were directors when significant decisions were made in 1999 and subsequent years, decisions which almost placed the WRU into an insolvent position.
To summarise, the composition of the WRU board, in the author’s opinion, fails to comply with best practice set out by government endorsed guidance relating to the governance of sport. In addition, the business acumen and experience of its board members falls short of that of comparable bodies, and if the National Representatives are the independent NED’s, their independence and calibre is questionable, certainly when compared to similar bodies.