Sports Governance Code begins to bite as cycling and table tennis funding put at risk
Recent weeks have seen two key developments highlighting the impact of UK Sport and Sport England's Code for Sports Governance with:
- Table Tennis England having its £9m funding settlement suspended after it failed to pass governance reforms; and
- British Cycling urging members to back reforms to protect £43m in funding.
The Code was published on 31 October 2016 and set new governance requirements for sports organisations receiving public funding. Details of the requirements of the Code are outlined here.
In brief, the Code has three tiers of standards which apply depending on the level of funding received. Bodies in receipt of in excess of £1m as part of multi-year settlements are required to comply with the prescriptive Tier 3 standards.
The Tier 3 standards include requirements that the board of the organisation is the ultimate decision-making body, there are term limits on board membership and at least a quarter of the board consist of independent non-executive directors. Much of the media attention has focused on the requirement for governance board membership to include a minimum of 30% of each gender, thereby encouraging gender equality across the administration of all publicly funded sports.
UK Sport and Sport England have made it clear that failure to comply with the Code will result in funding being suspended or withdrawn. Although specific timelines for compliance were not set out in the Code, funding contracts with organisations now include requirements to comply with the Code and the concrete impacts are now being seen.
Table Tennis England
On 10 July 2017, Table Tennis England announced that its members had failed to pass proposals for governance reforms which would bring the organisation in line with the Tier 3 requirements of the Code.
A special resolution (needing 75% of the votes of relevant members) was required to amend the articles of association of Table Tennis England, which is a limited company. Only 74.93% of members from the leagues and counties accepted the proposal. It appears from the notes circulated with the special resolution proposal that members' concerns surrounded the appointment process for board members and that independent directors may have very little table tennis knowledge and experience.
The Table Tennis England statement acknowledged that it is now in breach of its funding agreement with Sport England and that the funding had been suspended with immediate effect. It is the first body to suffer suspension of funding due to lack of compliance with the Code, although both Table Tennis England and Sport England have publicly stated that they are working to resolve the situation.
On 22 July 2017 British Cycling will hold an Extraordinary General Meeting in an attempt to pass governance reforms, which also require a 75% threshold of voting members. British Cycling is also a Tier 3 organisation under the Code and the funding at risk comprises £17m for grassroots investment and £26m for elite athletes preparing for the Tokyo Olympics.
Reports suggest that the proposals may fail due to a lack of support from regional representatives following 'mandate' meetings, with concerns cited surrounding the speed of change (which would result in 6 of the 8 current elected board members being forced to step down) and centralisation of authority in the board.
The proposals follow the June 2017 report of the Independent Review Panel investigating accusations of bullying in British Cycling which cited a lack of good governance at board level as one issue within the sport.
Despite the medal success of British Cycling in the recent past, the stance of UK Sport and Sport England means that funding is likely to be withdrawn unless governance which is compliant with the Code can be achieved.
Public funding for UK sports remains a highly contentious issue. In recent weeks, eleven sports (including Table Tennis England) have called for reforms to the way UK Sport allocates elite level funding, with sports not deemed realistic medal prospects receiving no funding. In a related development, Rebekah Tiler, an 18 year old weightlifter, went on 'strike' from the British Championships in protest at funding cuts.
With numerous bodies competing for funding, UK Sport and Sport England are in a strong position to insist on compliance with the Code as a condition of public funding. It is notable that Sport England had worked closely with Table Tennis in designing reform proposals which complied with the Code and has, at this stage, suspended funding, meaning that it may be restored if reforms can be achieved. As such, it appears that a collaborative approach is being adopted at this stage. It remains to be seen whether a hardline approach involving termination of funding contracts and reallocation of funds will be taken if reforms are not forthcoming.
This article was written by Richard Davies. For more information, please contact Richard on +44 (0)20 7427 6732 or at email@example.com.
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