Governance Trends in Clubs

Here are the key findings: 

Board Composition and Gender Diversity 

The average board size is 7.2 members, with 80.8 per cent male and 19.2 per cent female, which is below the national average of 35.5 per cent female board members in Australia.  This lower proportion of female representation means clubs could be missing out on valuable perspectives. 

Appointment of Independent Directors 

When it comes to boards, 96.6 per cent of directors are elected, 2.4 per cent are appointed and 1 per cent are nominated by third parties. This reliance on elections to unearth potential new directors may overlook qualified individuals, especially women. 

Term Length and Limits 

Directors serve varying terms: 10 per cent for one year, 45 per cent for two years and 46 per cent for three years. Despite recommendations for a nine-year limit, 54 per cent of clubs have no maximum term limit, with some allowing terms up to 25 years. Adopting a nine-year limit is crucial for fresh perspectives. 

Director Remuneration 

Directors receive an average of $4300 annually, much lower than the $200,000 average for corporate directors. The survey found that 95 per cent agree that directors should be compensated based on contributions, suggesting clubs should consider remuneration with performance expectations. 

It is worth noting however, that most not-for-profits in all sectors do not pay directors. For example, most state sporting oganisations do not pay their directors. 

Training and Development 

Training practices among clubs vary, with 5.5 per cent offering no training, 35.6 per cent providing standard governance training, 26 per cent including compliance training and 32 per cent offering a combination of governance, compliance and professional development.  

The Dunning-Kruger effect, where a small amount of knowledge can be dangerous, underscores the importance of comprehensive training for directors. 

Tapp's 20: Best Practices for Club Governance 

Warren Tapp's Tapp's 20 provides a robust framework for effective club governance: 

1. Ensure the constitution is fit-for-purpose.
2. Implement active board succession planning.
3. Recruit and remunerate effectively (e.g. nominations committee).
4. Align board skills with enterprise requirements.
5. Conduct proper and thorough inductions.
6. Obtain director commitment through sign-offs (code of conduct, board charter, conflict of interest).
7. Plan board activities with a 12-month calendar and commit to it.
8. Utilise relevant, skilled and briefed sub-committees without delegating board powers.
9. Ensure appropriate management reporting.
10. Identify, understand and plan for risks.
11. Keep the strategic plan, vision, mission and values current.
12. Conduct whole-board performance reviews.
13. Maintain effective policies and procedures to avoid surprises.
14. Ensure directors understand their duties, especially positive legal duties.
15. Foster a positive working relationship between the CEO and the board.
16. Monitor and understand finances with proper systems.
17. Provide ongoing director training and professional development.
18. Offer specific chair training.
19. Prevent directors from getting involved in operational matters.
20. Ensure directors are getting properly remunerated based on their contributions. 

By adopting these best practices, clubs can enhance their governance, ensuring that directors are not only properly remunerated but also effectively fulfilling their roles.