Australian Rugby Corporate Governance entered a new chapter this week with the board implementing changes based on the recommendations of the review run by Mark Arbib.
There were 15 recommendations in all and the full detail of the review and a summary of those recommendations can be found on the ARU website.
The fundamental change that is being implemented is a clear split between the voting members that are the ‘shareholders’ of the ARU and the board of independent directors that run it.
Arbib quotes David Crawford AO and Colin Carter OAM in their review of Cricket Australia to say that he recommends implementing “an ‘independent and well-skilled’ board that is clearly accountable to the owners and which doesn’t confuse its role with management”.
The change to this governance model is what required a 75 percent vote of support. These members of the ARU are detailed below and the distribution of the 16 votes is as follows:
One vote each for the eight member unions – QLD, NSW, ACT, VIC, TAS, SA, WA, NT.
One vote each for union with over 50,000 registered players – currently two (NSW, QLD).
One vote for each Super Rugby team – Waratahs, Brumbies, Rebels, Reds, Force
One vote for RUPA – the Rugby Union Players Association.
Previously there were 14 voting rights, with NSW controlling five and Queensland three. Under the new structure, NSW and QLD hold three each of the new total of 16.
This is a significant shift from eight out of 14 to the new structure where they control six from 16. Hand in hand with this was that NSW had a power of veto which has now been removed.
The structure of governance can be broken down per Arbib’s recommendation:
“With respect to the Members of ARU, the Member Unions and Super Rugby teams, these core duties should be:
• The right to dismiss a Director, or the whole Board, and appoint a majority of the Board.
• The right to approve or reject amendments to the Constitution.
• The right to approve or reject changes to ARU’s core business.
“While Members have other duties, such as receiving annual reports and accounts and ensuring compliance with corporations laws and the articles of association, these three core duties are the most important of the shareholders’ rights and responsibilities.
“In all other matters, the Board and management of ARU should have the freedom to act in the best interests of the business and, by virtue of this, the Members.”
Selection of the board is the other key change.
The proposal will see a four person nomination committee formed comprising the ARU Chair, another representative selected by the Board and two representatives selected by the members. The members representatives can hold no formal association with a rugby organisation.
The nomination committee will make recommendations to the members for the election of six directors requiring approval of a two-thirds vote from the members. In addition the directors of the board are able to appoint up to two other directors bringing their complement to eight.
There are other recommendations which will seek to have the ARU more closely engaged with both the Super sides and to clarify its position as ‘keeper of the game’. There is a recommendation that the ARU work with members to develop a National Charter of Rugby defining roles and responsibilities at all levels of the game.
The vote split is probably the most interesting facet of this.
As it stands NSW and QLD will hold 37.5 percent of the votes while other members control 62.5% between them. The voting to appoint Board Directors requires a 66% majority meaning neither the biggest states nor the other members as a block have a controlling interest.
This along with the removal of NSW’s power of veto should create greater opportunity for the game nationally rather than allowing a conflict of interest to guide the national body.
These changes all seem sensible to me, I’ll be interested to see what impacts we see from them in the running of our game.
jeznez
Roar Guru
Even worse looking back on this after a decade!
Tim Schuster
Roar Rookie
It’s now 2018. Things haven’t gone well.
Matthew Skellett
Guest
I would sincerely hope out of this 'power restructure ' that it clears the way for a truly NATIONAL THIRD-TIER COMPETITION that most stakeholders of every stripe recognises is a goal that will benefit this country
sixo_clock
Roar Guru
And we'll never hear (insert positive comment here)-ugly ever again. Not good news for the shackledraggers though with a competent viable NSW we may have to get very sneaky in poaching talent. Ps: how far have the negotiations developed re you taking up a desk and clipboard near Cheika?
jeznez
Roar Guru
too hard to see from here in SG - Carmichael looks to have done a great job in Qld but is he looking for a move? Have noted a number of people noting a number of AFL guys and Jeff Miller - all have potential. I think the discussion points are more around what might a new CEO aim to deliver - particularly given O'Neills dedicated stance against things like the ARC and his drive to gain the fifth franchise. The new CEO brings the potential for a fundamental shift in focus - no matter who it is.
Jutsie
Guest
Who are your preferences for the CEO position Jez?
jeznez
Roar Guru
Cheers Chivas. I'm pleased to hear my bellyache worked - it was advertising! I've said to a few others that I didn't expect this to generate a lot of discussion, was just keen to put out there some of the detail of the change. Am working on my next article to look at what these changes and the new CEO may bring to the Aussie game - hopefully that one fires a few people up. :)
jeznez
Roar Guru
I should have been talking in blocs not blocks! NSWRU has found its McCall and you mentioned both the key players in Chairman Farr-Jones and President Gavin - the old 8-9 combo is up and operating again. I think the leadership of these two should not be underestimated. It is quite likely that some of the former NSWRU boards would have exercised NSW's power of veto rather than loosen NSW's control of the ARU the way they have. They have given up the veto and seen the votes they control drop from 5/14 to 3/16 it is a significant reduction. Cheika has also come on board under these two's watch and I have fingers crossed that he will be just what the side needs. NFJ has also said that the Waratahs Board will be under review. I'm very pleased by the things the current NSWRU board has acheived so far, while realising there is still a lot more for them to do.
Chivas
Guest
Good article Jez. I only read it because you were bellyaching in another forum how Quade and Robbie are getting all the attention. But an excellent read. I think this has a very balanced feel. Regardless of what parochial fans think and I'm sure they will find things to grumble about... Like where the offices are :-). Seriously good move.. a much fairer representation hopefully forcing everyone to work together. Also like the independence between board and Management. Also want to see the management to coordinate the self interest of coaches of SR teams and provide an overall integrated approach which serves both the Wallabies and the development of the game. For me the disconnection has been a real problem for a while. But the separation of duties and the structures seem to be very good. I don't think things will change immediately, but the attitudes will. Much more professional. Thanks again Jez for the effort putting this together.
sixo_clock
Roar Guru
Hey, if it isn't the HPMsdib himself, talking of blocks... looked in a mirror recently? I should have defined shackledragger, it is of course the non traditional Super sides, Brumbies, Force and Rebels. The most likely to break ranks is the QRU and/or the Reds (if they could ever agree with anyone else and take a supporter team spot, with a potential 3 votes) which is the shake-up (read shut-out) that NSW needs. If the NSWRU could find a 'Rod McCall' and support him then who knows what may happen. Unfortunately, and this is so familiar with the RSL, where the organisation and clubs are mostly run by the vets who were mere cooks and bottle-washers and not by the men who fought and so they look after the other cooks and b-w's whose most violent action was to duck. We need veterans who went through the process from frightened little boy to successful Wallaby and should be highly suspicious of anyone who made that journey but fell short. I'll tipple to the nor' nor' west at about 6.05pm. It is the clubs and schools who need the visits, clinics, signed balls and guerseys, photos and memories which sustain the drive to play our game, the real Rugby, as far as your genes and drive can take you and from that we will find more Nobodies, NFJs, Noddys, Bernies, Gregans, Gavins... who did the business.
ThelmaWrites
Guest
Thanks for the trouble of answering my query, Jez. Can't fathom the implications of "one objective....a strong rugby culture on the Board". Fostering an in-group inclusiveness? Not good.I'll give it further thought (not much, I'm in the middle of packing for a trip). Merry Christmas in advance!
Crazy Horse
Guest
Rejuvenating grassroots rugby & increasing player participation numbers continues to be the real weak link of NEW SOUTH WALES rugby Sheek. Some parts of Australia are doing quite well. In WA the problem in Community Rugby (I hate the term "grassroots") is finding enough grounds to put the players on.
jeznez
Roar Guru
Sheek - the voting structure has a carrot for the smaller Unions to gain an extra vote they need to register players. For the ACT they would need to almost double in size from their current approx 27,000 players to hit the 50,000 limit. You'd think that Victoria - although it has a much smaller player pool to start with, due to its comparatively larger population has a stronger chance of reaching that limit. There isn't a similar incentive for NSW and Qld to continue raising their pool of players. If the ARU with its new incoming CEO doesn't seek to institute a national domestic comp then I hope something like the Warren Livingstone post Shute Shield/Hospitals Cup comp kicks off. I haven't heard anything on that since September and wonder if we'll hear something in the new year once the new CEO is in place.
jeznez
Roar Guru
ps Thelma - you won't like this directive in the changes: "one objective of the Committee should be to promote the maintenance of a strong rugby culture on the Board"
jeznez
Roar Guru
thanks mate
jeznez
Roar Guru
Thelma - that 'not associated with a rugby organisation' rule relates to the Member's representatives on the Nomination Comittee. The Nomination Committee then presents its candidates to the Members at the ARU AGM for them to elect the eventual board. I agree that we want to get directors who are focussed on the ARU rather than representing the state of rugby that they came from. The 66% of votes seems to be the mechanism that should drive the change - rather than the current situation where certain Members are able to nominate their own Directors. Finding a few directors from outside the rugby ranks remains an incredibly sensible option in my mind - hopefully the Nomination Comittee finds these candidates. If that fails then hopefully when the 6 elected Directors are in place and they select the two further Directors who get to join them, they look for the best candidates to fulfil the required skill set of management - rather than just looking in the existing state unions.
jeznez
Roar Guru
Farr-Jones has said that he will review the split board. I'm not sure what the timeframe on that will be.
ThelmaWrites
Guest
I’m not so much interested in the voting numbers as much as eligibility. Shouldn’t there be a clear stipulation as well that some members of the Board of Directors are, not only NOT involved with management, but also NOT hold formal association with a rugby organization? A clearly important consideration.
Jutsie
Guest
Wasnt there rumours that the NSWRU were thinking of going back to the old system where they ran the tahs instead of the tahs being a separate entity?
Jutsie
Guest
Sheek at least we have a better chance of moving in this strategic direction with the new structure, we should have directors that are theoretically making decisions independent of the more powerful members, and the power of NSW/QLD has been diluted thus ensuring they will not vote in directors who are proxy for their own interests. Hopefully like is mentioned on another thread a few outsiders who have had success in other fields will be brought in to provided an alternate perspective to the status quo. I really think guys like adrian anderson or ben buckley should be on the shortlist for CEO as they have both been highly successful in the largest code in the country and fastest growing code in the country respectively.