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Ever thought you wouldn’t mind jumping onto the ARU board and shaking things up a bit? Standing up for the grassroots and getting all Darryl Kerrigan on the ARU’s ass?
It’s a grand idea, the sort of idea that has fuelled a thousand bar debates and even one bar fight that I know of.
After all, if the Smokers Rights Party and the Bullet Train for Australia Party can contest the senate, why shouldn’t a group of aggrieved rugby supporters be able to form a ticket to get on the board of the Australian Rugby Union?
Sorry. Not going to happen.
If the ARU was a democratic government, it would have to have an election. Then maybe you could run, but it ain’t, so you can’t.
And if it was a public company, you’d be able to vote on director appointments as a shareholder. But you guessed it, it ain’t that either.
Getting nominated for the board and getting on it might technically look like an open process, but in practice it’s not. At least not for 95 per cent of us, and here’s why.
There are nine directors on the board and at least six of them have to be independent – that is, have no formal role with any rugby body. You can be interested in rugby, or even be an amateur player, but not hold a formal position – the idea being to promote independence. So far, so good.
These nine directors are voted in by voting members (the state unions and RUPA) and they have to get a two-thirds majority vote from members to get on. Once they’re on, a term is three years, and they can stay for up to three terms, so a popular director might stay for almost a decade.
The people with the power to hire and fire are the nine voting members of the ARU. There are more than nine votes though, because members get an extra vote for a Super franchise and another extra vote if they have more than 50,000 registered players.
So the members vote on the new candidate directors and re-election directors at the AGM each year.
There’s a little back door here. The directors have the right to appoint a director themselves at any time during the year, and that person can serve as a director until the AGM, where they will get voted on to stay, or voted off. You’d have to imagine that it would be pretty unlikely that they’d get voted off, so it is a way to sidestep the process a little and get entrenched before voting.
Now you’re probably wondering where do the director candidates come from in the first place? Well, here’s why it isn’t you, or anyone you know.
Director candidates are vetted and put forward by a nominations committee, which is a four-person gig. It’s the chairman (Michael Hawker) plus one external rep nominated by the board and two external reps nominated by the members. Recent members of this committee include the Hon Peter Heerey AM QC (Federal Court judge), Ms Josephine Sukkar (among other things a director of Opera Australia), and John Massey (member of the Board of Governors for the Committee for the Economic Development of Australia is just one role on his CV).
Now I don’t know about you, but CEDA and Opera Australia aren’t on my weekly dance-card, not to mention the Federal Court, so this is a crowd that probably aren’t too easy to impress.
In any case, to impress them you have to get in front of them, and that means getting on the radar.
What sort of people get on the radar? The sort of people who are on a first-name basis with headhunters, that’s who. High-end executive search firm Egon Zehnder are charged with tracking down the requisite corporate titans and it’s not too hard to find candidates. After all, despite being borderline insolvent, the ARU board is still a strong addition to a CV. It’s a bit like being on the SCG Trust – it’s a blue ribbon appointment.
And of course, from the ARU side, there’s a certain amount of ego involved in getting heavy hitters on the board, not to mention the obvious corporate nous and contacts that go with them.
As the ARU annual report says, “The board is committed to fostering an appointment process that reflects an appropriate level of cultural, geographic, age and gender diversity”, and unfortunately that’s where things go slightly awry.
The positive effect of diversity on boards is a bit like climate change – it is overwhelmingly agreed to be a valid concept, and only the crackpots think otherwise. Also like climate change, only the truly enlightened souls take action to do something about it – the vast majority just pay lip service.
Diversity, or lack thereof, explains a lot about the difficulties the ARU has in engaging the rugby public. Simply put, it’s because the rugby public are nothing like them.
This is not to say that the board isn’t smart people with good intentions. There’s no doubt that some of the smartest corporate brains in Australia are in the room (and incidentally, two of the smartest are women).
It’s not the smartness, it’s the sameness that’s the problem.
The phrase is ‘unconscious bias’ and it refers to an idea first floated by Nobel Prize winning psychologist Daniel Kahneman, that human beings are not as rational as we might think. In fact, we don’t often make quality rational decisions. Our decisions are skewed by familiarity and also by situations which conform with our existing experience. These two biases are known as the familiarity heuristic and hindsight bias.
In board behaviour, this translates to an ongoing selection of ‘people like us’. When confronted with two candidates, the familiarity heuristic tells us that the one most like us is the obvious choice (it just feels right), and hindsight bias reinforces our decision, because we can easily recall other situations where we recruited a person like this. Add to this that the nominations committee is also made up of ‘people like us’ and it’s an uphill battle for an out-of-the-box candidate.
Don’t believe me? Check out the board members of the ARU for the last five years. In that time there have been 18 directors. 16 out of 18 have been men. 12 out of 18 went to private schools and 14 out of the 18 went to university. A staggering 17 out of 18 have been a company CEO, or sit on other boards, or both. Add in the nominations committee and that number climbs to 21 out of 22.
15 out of 18 were between 45 and 65 years old, with one being older. Interestingly, despite the prevailing stereotype, only 6 of 18 have been Wallabies – Hawker, John Eales, Paul McLean, Brett Robinson, George Gregan and Mark Connors, although Wallabies make up four out of nine current board spots.
And out of all directors in those five years, all ticked four or more of six criteria (male; private school/university; CEO/director; Wallaby; 45-65; Anglo).
What does this tell us? Simply that if you’re a private school and university educated Anglo man, with experience as a CEO and/or a director and you’re over 45, you’re a shoe-in for the ARU board. If you’re also a Wallaby, then the vote is a formality. Outside of this though – not much chance.
Even the female directors to whom most would point as an indicator of diversity – Nerolie Withnall, Ann Sherry and for the exercise include Josephine Sukkar on the nominations committee – only make up 11 per cent of directors, and they still conform largely to the stereotype. Their only differentiating factor is that they are women. Other than that – private school, university, director, CEO, Anglo, over 45… Tick, tick, tick, tick, tick.
It’s amusing to note that by these criteria, one of the most radical board appointments has been George Gregan. He is at least African-Australian, slightly under 45 and not a CEO or director in the classic sense of the word. Although of course, he is one of the greatest all-time Wallabies, which pretty much trumps everything anyway.
The question that needs answering after all this analysis is: to what degree does this board reflect the mix of rugby people in Australia?
The answer has to be: hardly at all.
Perhaps we could then go on to ask: why does it need to reflect the mix? Isn’t board competency the key issue here?
The answer lies in the difference between ‘shareholder’ versus ‘stakeholder’. The ARU doesn’t have dispassionate shareholders, it has passionate stakeholders – the vast majority of whom are nothing like the board who are charged with directing the fortunes of the game.
While the organisation mightn’t belong to the stakeholders, the game certainly does, and the ARU are custodians however much they might like to think they are owners.
As custodians, they need to engage with the rugby public – a group which is largely under 40; which includes tradesmen, school leavers, students and shift workers; which draws from several races including Indigenous Australians, Pacific Islanders, Asians, Europeans and others; which overwhelmingly attended public schools; and which for the most part simply has jobs, not corporate careers.
The assumption that the backbone of Australian rugby – varying degrees of non-anglo, non-GPS, non-university, non-corporate – is incapable making valuable contributions at a board level is seriously misguided.
The ARU struggles to engage with the public largely because it is run by a small group of very similar people whose skill is attracting shareholders’ money to public companies by making profits.
It’s the wrong approach and the wrong skillset. Not-for-profits, like the ARU, make money by attracting and retaining a large stakeholder base, and stakeholders aren’t attracted by profits.
They’re attracted by shared values.
The ARU board is in desperate need of greater balance and diversity. It needs more members with skills in stakeholder and member service organisations, and who share the values and experience of the rugby grassroots.
As I’ve said before, it’s not necessarily the smartness that’s the problem. It’s the sameness.
Vive la différence.