Sport Governance Books in the Sport Management Series Sport Governance Russell Hoye and Graham Cuskelly Sport and the Media Matthew Nicholson Sport Funding and Finance Bob Stewart Managing People in Sport Organizations Tracy Taylor, Alison J. Doherty and Peter McGraw Sport Governance Russell Hoye and Graham Cuskelly AMSTERDAM • BOSTON • HEIDELBERG • LONDON • NEW YORK • OXFORD PARIS • SAN DIEGO • SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO Elsevier Linacre House, Jordan Hill, Oxford OX2 8DP, UK 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA Copyright © 2007 No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone (44) (0) 1865 843830; fax (44) (0) 1865 853333; email: permissions@elsevier. 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Because of rapid advances in the medical sciences, in particular, independent verification of diagnoses and drug dosages should be made British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Control Number: A catalogue record for this book is available from the Library of Congress ISBN-10: 0 7506 6999 3 ISBN-13: 978 0 7506 6999 3 For information on all publications visit our web site at http://books.com Trademarks/Registered Trademarks All brand names mentioned in this book are protected by their respective trademarks and are acknowledged Typeset by Charon Tec Ltd (A Macmillan Company), Chennai, India www.com Printed and bound in the Netherlands Contents List of Figures ix Series Editor xi Sport Management Series Preface xiii Preface xv Abbreviations xix Part One Sport Governance Concepts 1 The sport governance game 3 Introduction 3 Corporate and nonprofit governance 6 Defining sport governance 9 Governance theories 11 Conclusion 15 2 The playing field: influences on sport governance 16 The playing field 16 Government and nonprofit sector relationship 20 Regulatory environment 21 Government sport policy 23 Governance guidelines 25 Globalization 27 Stakeholder expectations 28 Conclusion 31 Part Two Sport Governance Fundamentals 3 Team structures: governance structures in sport 35 Governance structure elements 36 International cricket 37 Governance structure issues 43 Organizational theory 44 Governance models 47 Inter-organizational relationships 51 Conclusion 53 4 Team positions: governance roles and responsibilities 54 The role of nonprofit boards 55 Research on roles within nonprofit boards 57 Roles of nonprofit sport boards 61 Individual board member roles 69 v Conclusion 72 Contents 5 Team selection: board composition and recruitment issues 73 The right to govern 74 Board composition 75 Guidelines for voting systems and selection 77 Football Association 81 Canadian Olympic Committee 82 Football Federation Australia 85 Victorian golf challenges 86 Conclusion 87 6 Teamwork: board behaviour and culture 89 Teamwork guidelines 90 The board meeting 91 Board behaviour model 94 Board culture 96 Board member commitment 100 Conclusion 103 7 Offensive game plans: strategic governance 104 Strategic contribution of the board 104 Pressures for boards to engage with strategy 109 Guidelines for the board’s role in strategy development 110 How well do boards engage with strategy? 112 Enhancing the strategic contributions of sport boards 115 Conclusion 117 8 Defensive game plans: risks, compliance and conformance 118 Compliance and risk management roles of the board 119 Legal compliance and risk management standards 122 Guidelines for risk management 123 How well do nonprofit boards manage risks? 126 The Basketball Association of South Australia 129 English professional football clubs 130 Implementation issues 131 Conclusion 132 9 Team leadership: dual leadership challenges 134 The effects of professionalization 135 Board–staff relations 136 Power and influence in decision-making within boards 141 Dual leadership 143 Conclusion 148 10 Team performance: board, board member and CEO performance 150 vi Evaluating board performance 151 Correlates of board performance 154 Contents Organizational and board performance 157 Board member performance 161 CEO performance 163 Conclusion 163 11 Team rules: ethics and principles of good governance 166 Ethical governance 167 Statutory requirements 171 Corporate sector governance codes, principles, guides and standards 173 Nonprofit sector governance codes of practice 175 Sport governance guidelines and principles 177 Other pressures for ethical governance behaviour 179 Conclusion 182 Part Three Sport Governance Future 12 Team changes: surviving and managing governance change 185 Drivers of governance change 186 Manifestation of governance change 190 Managing governance change 192 Conclusion 196 13 Future seasons: sport governance challenges of the 21st century 197 Maintaining legitimacy 198 Maintaining the values of sport and volunteer involvement 200 Inter-organizational linkages 202 Knowledge development 203 Conclusion 204 Bibliography 207 Index 223 vii This page intentionally left blank List of Figures 1.1 Theoretical perspectives on organizational governance 2.1 Influences on governance within nonprofit sport organizations 2.2 Stakeholders for sport NGBs 3.1 Organizational structure of the ICC 3.2 Sub-committees of the ICC 3.3 Cricket Australia Board of Directors 4.1 Eleven key roles for the board of a nonprofit sport organization 4.2 Roles, powers and responsibilities of the Executive Committee of the International Rugby Board 4.3 Roles and responsibilities of the board of the Canadian Cycling Association 5.1 Board member skills and competencies 5.2 Membership categories of the Canadian Olympic Committee 6.1 Factors that contribute to an effective board team 6.3 Model of board behaviour 7.1 Benefits of sport boards engaging in strategic activities 7.2 Strategic tasks and roles 7.3 Strategic plan content 7.4 Reasons sport boards are not effective in providing direction 8.1 Differences between legal compliance planning and risk management 8.2 Elements of the Australian Standard for compliance programmes 8.3 Risk management process 8.4 Risk management roles of the board 8.5 Implementing the board’s monitoring role 9.1 ASC principles for an effective board-executive relationship 9.2 SPARC elements to consider in developing an effective board-executive relationship 9.3 Leader-member exchange relationships within a board 9.4 The board and CEO relationship 10.1 Reasons for resisting attempts to evaluate board performance 10.2 Relationship between theoretical perspectives, board performance and organizational performance ix 10.3 Intellectual capital model of the board List of figures 10.4 A checklist of key elements in chief executive performance management 11.1 Sources of regulatory and compliance pressure for ethical governance behaviour 11.2 Arguments for and against self-regulation 11.3 Enforcement continuum for ethical governance behaviour 12.1 Drivers of governance change x Series Editor Dr Russell Hoye is Senior Lecturer in Sport Management, School of Sport, Tourism and Hospitality Management, La Trobe University, Victoria, Australia.
Russell has taught sport management courses since 1993 in Australia at La Trobe University, Griffith University, and Victoria University as well as the University of Hong Kong and Tsinghua University in China. His main teaching areas are sport management, organizational behavior, sport pol- icy, and sport governance. Russell serves as the Coordinator of Honours and Postgraduate Studies for the School of Sport, Tourism, and Hospitality Management at La Trobe University. He is a former Board Member of the Australian and New Zealand Association for Leisure Studies (ANZALS) and a current Board Member of the Sport Management Association of Australia and New Zealand (SMAANZ).
He was the Guest Editor for the inaugural special issue of Sport Management Review on professional sport in Australia and New Zealand published in 2005. Russell’s areas of expertise include corporate governance, organiza- tional behavior, volunteer management, and public sector reform within the sport industry. He has acted as a consultant for the Australian Sports Commission, Sport and Recreation Victoria, and a number of local gov- ernment and nonprofit organizations. His research interests focus on exam- ining how governance is enacted with sport organizations and how volunteers engage with and are managed by sport organizations.
He has published articles on these topics in journals such as Nonprofit Management and Leadership, Sport Management Review, European Sport Management Quarterly, Society and Leisure, International Gambling Studies, Third Sector Review, Sporting Traditions, Managing Leisure, Football Studies, Annals of Leisure Research, and the Australian Journal on Volunteering. xi This page intentionally left blank Sport Management Series Preface Many millions of people around the globe are employed in sport organiza- tions in areas as diverse as event management, broadcasting, venue man- agement, marketing, professional sport, and coaching as well as in allied industries such as sporting equipment manufacturing, sporting footwear and apparel, and retail. At the elite level, sport has moved from being an amateur pastime to a significant industry. The growth and professionaliza- tion of sport has driven changes in the consumption and production of sport and in the management of sporting organizations at all levels of sport.
Managing sport organizations at the start of the twenty-first century involves the application of techniques and strategies evident in the major- ity of modern business, government, and nonprofit organizations. The Sport Management Series provides a superb range of texts for the common subjects in sport business and management courses. They pro- vide essential resources for academics, students and managers, and are international in scope. Supported by excellent case studies, useful study questions, further reading lists, lists of websites, and supplementary online materials such as case study questions and PowerPoint slides, the series represents a consistent, planned, and targeted approach which: ■ provides a high-quality, accessible, and affordable portfolio of titles which match management development needs through various stages; ■ prioritizes the publication of texts where there are current gaps in the market, or where current provision is unsatisfactory; ■ develops a portfolio of both practical and stimulating texts in all areas of sport management.
The Sport Management Series is the first of its kind, and as such is recog- nized as being of consistent high quality and will quickly become the series of first choice for academics, students, and managers. xiii This page intentionally left blank Preface The focus of this book is the governance of nonprofit sport organizations and the practices employed by their boards to carry out their governance role. Books on corporate governance are generally written from a legal, financial accounting or organizational behaviour perspective. The com- plexity of governance in nonprofit sport organizations that are tradition- ally governed by a volunteer board lends itself to an examination from the perspective of organizational behaviour.
This book explores how the issues of structure, culture, strategy, leadership, change and performance are considered by volunteer boards and their paid staff in governing sport organizations. The principles and ideas in this book are relevant to large community sport clubs; sport governing bodies at the regional, state or provincial, national and international level; professional sport franchises that operate on a nonprofit basis; and allied sport organizations that deliver events, manage stadia or facilities or deliver services to sport participants and consumers. The boards of nonprofit sport organizations must deal with many chal- lenges in the discharge of their governance responsibilities. The changing nature of the relationship between government and the nonprofit sector, an increasingly demanding regulatory environment, the influence of govern- ment sport policy, the impact of globalization processes and increased com- petition, the expectations of diverse stakeholder groups, and the imposition of prescribed governance guidelines all impact on the governance of non- profit sport organizations.
To varying degrees these challenges are the raison d’être for sport organizations to re-examine their governance structures and practices in striving to meet ever-increasing expectations and standards of transparency, accountability and performance from a wide range of stakeholders. The importance of good governance in achieving high levels of organizational performance has become increasingly recognized by the gov- ernment agencies that provide significant and ongoing funding to sport organizations. Boards are crucial for the continued effective delivery of sport opportun- ities to participants and spectators.