Code for Sports Governance
Back in December 2017, Sports England declared that an impressive “55 out of the first 58 national bodies for sport to have been involved with the new Code for Sports Governance” had complied with all the requirements within the new Code. An impressive feat given that the Code had only gone live just 9 months beforehand.
Keeping with our sports theme this month, we thought we’d remind readers on the general requirements of the Code, many of which can be adopted by non-sports organisations as a sign of good governance, especially those that are not subject to other sector specific governance codes.
Mandatory & Tailored
As taken from the Code’s Foreword itself, unlike most other Governance Codes, this is a mandatory set of requirements for those organisations seeking public funding. Bodies therefore had to act quickly with many having to make significant changes in order to comply. Many of the national bodies wouldn’t survive without public funding and so for many, it was make or break in terms of compliance. 34 of the national bodies had to make “significant constitutional changes” in order to comply and did so within a tight 6-month time frame. With such a high number declared as fully compliant, maybe lessons could even be learned outside the sector, with how to ensure our other Governance Codes are fully complied with….?!
In some ways you could argue that it was even harder to create a Code within Sports given the shear difference in size and type of organisation that had to comply with it (from large house-hold name organisations like the FA to smaller, maybe less well known membership organisations like British Water Ski and Wakeboard). However, to ensure that smaller bodies are not put off applying for funding or bogged down with heavy bureaucracy the Code adopts a tiered approach whereby requirements for compliance and timelines for compliance are tailored. The tiers relate to investment levels with Tier 1 requirements apply to all bodies seeking public funding, and Tier 3 applying to those with the greatest level of investment etc.
Principles and Requirements
The Code is comprehensive with over 50 requirements for those categorised in Tier 3. We will just highlight the 5 Principles, but you can check out the full Code for all requirements.
As you can see, the Principles and many of the requirements could be used by all types of organisation, not just sport bodies, as a way of seeking best governance standards. Many of them will be familiar to you and mirror those found in the various established governance codes.
Organisations shall have a clear and appropriate governance structure,
led by a Board which is collectively responsible for the long-term success of the organisation and exclusively vested with the power to lead it. The Board shall be properly constituted, and shall operate effectively.
Requirements linked to this Principle include: The organisation is properly constituted, has a clear purpose and, if membership based, is inclusive and accessible; The governing committee meets regularly and decision making is recorded (All Tier 1 requirements).
Organisations shall recruit and engage people with appropriate diversity, independence, skills, experience and knowledge to take effective decisions that further the organisation’s goals.
Requirements linked to this Principle include: Conflicts of interest are recognised, managed by the chair and recorded. At least three of the people on the committee are unrelated or non- cohabiting; In deciding who sits on its governing committee the organisation considers the skills and diversity required of its committee members; Committee members are subject to regular election and ideally should serve no more than nine years (All tier 1 requirements).
Organisations shall be transparent and accountable, engaging effectively with stakeholders and nurturing internal democracy.
Requirements linked to this Principle include: Annual accounts are prepared, scrutinised independently of the person responsible for finance (e.g. treasurer) and are made available to members to describe how money has been spent (Tier 1 requirement); Each organisation shall publicly disclose information on its governance, structure, strategy, activities and financial position to enable stakeholders to have a good understanding of them (a Tier 3 requirement).
4. Standards and Conduct
Organisations shall uphold high standards of integrity, and engage in regular and effective evaluation to drive continuous improvement.
Requirements linked to this Principle include: The organisation has a bank account and two independent signatories are required for payments (Tier 1 requirement); Each organisation shall adopt a mandatory directors’ code that, amongst other things, requires all directors to act at all times, with integrity, in a forthright and ethical manner and in accordance with their organisation’s conflicts policy (Tier 3 requirement)
5. Policies and Processes
Organisations shall comply with all applicable laws and regulations, undertake responsible financial strategic planning, and have appropriate controls and risk management procedures.
Requirements linked to this Principle include: Each organisation shall exhibit honesty, integrity and competence in financial matters; The Board shall adopt appropriate and proportionate finance policies and procedures; The Board must actively plan and monitor the financial position and performance
of the organisation against an annually approved budget and at least four-year financial forecast (Tier 3 requirements).
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