The Code for Sports Governance (the “CSG”) sets out the levels of transparency, diversity and inclusion, accountability and integrity that are required from those organisations who seek, and are in receipt of, UK Government and National Lottery funding from UK Sport and/or Sport England.
So, putting the CSG into context, the UK Corporate Governance Code (“UKCGC”), which sets out principles of good corporate governance aimed at companies listed on the London Stock Exchange, is 20 pages long and contains 41 provisions. The CSG in comparison is 68 pages long and contains far more detail. In mitigation, this extra content is required as the CSG has been drafted to reflect the tiered, threshold driven approach taken to sports’ governance by Sport England and UK Sport.
However, whereas the UKCGC is designed for an arguably more sophisticated, professional reader who will be well-versed in governance and the language of the boardroom, the CSG is aimed at, in many cases, volunteers and people who probably have never heard of corporate governance. Is it then right that the CSG should be so long?
The CSG was originally created in 2016 and was reviewed in 2020, leading to the CSG we have today. Recognising the length and content, and wanting to make the CSG both user-friendly and usable, the basic Tier 1 requirements applicable to all organisations in receipt of funding have also been launched as a separate document. A document spanning some 43 pages.
Despite eight pages of definitions and 56 defined terms in the CSG, there is no actual definition of corporate governance, what it is and why it’s important which is unhelpful. The “definitions” section is not a simple glossary, it’s more of a deep dive into the many facets of governance and contains a lot of detail. It’s debatable whether this is of any use to anyone unfamiliar with corporate governance as the point of any guidance is surely practical application rather than theory? There is no actual explanation on “how” you need to do any of this and too much emphasis on the “what”.
Some of the explanations provided are misleading as well. For example, the CSG rightly highlights that term limits for directors are important, pointing out that the need for fresh ideas and approaches is essential for good governance but isn’t this really succession planning and board composition? There is also no mention of independence which is the key driver for term limits. The fact that so many of the definitions overlap won’t help the inexperienced either.
For example, what people really want to know is “where do I find the rules” regarding appointing a new board member, for example? This is not made clear in the definitions as you need to read all the separate entries for articles of association, constitution and the governing document to find out what might be applicable to your organisation.
There are some differences in the application of governance in sport which are highlighted e.g. the role of Chair and CEO. In the corporate world, it’s more straightforward. The CEO runs the company, the Chair runs the board. The role of the chair is enhanced in sports governance and is more of a leadership role.