Executive recruitment ‘boys club’ style

29/05/2023

2023 has seen the departure of several CEOs from Australian sporting organisation CEOs - including Rugby Australia, Swimming Australia and Tennis Queensland. In this article, the Governance Institute’s Charles Dane asks is this just another period of turmoil for sports executives in Australia or are there unaddressed systemic cultural issues plaguing sports boardrooms?

 

It’s been almost seven years since sportswriter Gideon Haigh penned his essay about the poor culture and lack of good governance in Australian sports boardrooms.

At that stage, the NRL had seen five CEOs in four years, three ARU chiefs in six months, and half of the directors at Tennis Australia had resigned.

Little has changed. So far in 2023, we’ve seen:

  • The resignation of Rugby Australia CEO, Andy Marinos,
  • A fifth CEO at Swimming Australia in just six years after CEO Eugenie Buckley resigned,
  • The departure of Tennis Queensland CEO, Anthony White,

… and the quest for the next AFL Chief Executive.

Is this just another period of turmoil for sports executives in Australia or are there unaddressed systemic cultural issues plaguing sports boardrooms?

The French government is tackling their sports governance issues head on, setting up a national committee to help strengthen sport governance fundamentals and ethics in French sport after multiple governance crises in French sporting organisations.

As Australian sports leagues have become increasingly sophisticated and staffed by highly skilled corporate executives, it is important to remember the fundamental differences between a ‘for profit’ company and a sporting organisation, and the need to understand the ‘blurred proprietorship of sports’.

As CGI UK and Ireland notes in its Future of Sports Governance Report:

‘Sport is a social expression – not a business like any other – and fulfils a unique social, educational and cultural role which benefits society as a whole’.

It therefore needs fit-for-purpose governance.

Too often, Australian sports boards rely on existing networks and processes to recruit their senior leaders, without seriously looking at the incredible potential of outside the usual channels for talent. As such, the executive churn will continue and lead to a further entrenchment of the existing power dynamics, governance concerns and no change to what Haigh describes as the ‘curious mix of shiny corporatism and altruistic volunteerism, cosy privilege and noblesse oblige’ that make up sports governance in Australia.

The curious case of failed succession planning at the AFL

While it seemed at times that Samuel Beckett’s Godot might arrive sooner than AFL CEO Gillon McLachlan’s successor, the search finally ended with the appointment of internal candidate, Andrew Dillon.

The AFL has a history of successful executive succession planning and is often seen as the gold standard for sports administration in Australia. When Gillon McLachlan’s announced his intention to step down at the end of the 2022 AFL season, giving the AFL the ‘right runway to work through the succession process’ outsiders assumed the process would be a relatively straightforward. From a governance perspective, appointing and replacing the CEO is a key board responsibility, particularly in Australia’s largest sporting codes given the unique role they play in society. A robust senior executive succession plan is also a hallmark of a well-governed organisation.

As months went by with minimal public developments, angst grew among club executives that the AFL was fundamentally failing on one of the key issues for all large businesses: senior executive succession planning.

More governance concerns also lingered in the background. The AFL Board is typically made up of nine Commissioners but following resignations in early 2021 and no replacements, there were only six Commissioners (excluding the Chairman) left to appoint the new CEO.

These vacancies caused concern amongst the clubs, with one club CEO reported as saying:

‘One of the reasons they are indicating why they haven’t picked new commissioners is they don’t want the new commissioners, the inexperienced commissioners who might lack AFL industry knowledge to have a say in who might be the next AFL CEO’.

By March 2023, it was clear that one of the internal candidates, Andrew Dillon had become the clear favourite. To the concern of some stakeholders however, a major twist was happening in the background. Kylie Watson-Wheeler, a club President and the Managing Director of Disney in Australia and New Zealand, was being pushed to take the CEO role. This push ultimately failed in April when the Commission voted four votes to three to reject the appointment.

External criticism of the process intensified with leading sports journalist Caroline Wilson calling the recruitment process ‘embarrassing’ and ‘unprofessional’ and former Essendon football great Matthew Lloyd saying the process was a ‘dog’s breakfast’.

After a process lasting more than 12 months, and included the engagement of an external recruitment consultancy, on May 1, the AFL eventually appointed early favourite and one of McLachlan’s deputies Andrew Dillon.

Sports Governance Culture

The controversy surrounding the appointment of the new AFL CEO as well as recent CEO resignations in three other major Australian sporting organisations underscores several key governance issues.

Given the key role of the board in appointing a CEO, some sort of reckoning is required within Australia’s sports administration community as to what is not working, and why senior executive succession planning is proving so difficult.

It also begs the question, why has it not been possible to find a more diverse candidate to lead Australia’s biggest sport, the AFL? Given the growing involvement of women on many AFL Club boards and multiple women Presidents of individual clubs, there should conceivably be a flourishing pipeline of options. The same question can also be asked in relation to some other codes who are continuing to be led by the same pool of candidates.

Despite efforts to find an outsider to be the new CEO, the AFL reverted to type, inviting questions about the perceived engrained ‘boys club’ culture, and echoing the issues raised by Haigh in his 2016 essay.

With representation of women on boards at only 35% in Australia and other aspects of diversity even less well represented in Australian boardrooms according to the 2023 Board Diversity Index, this is a fair and important question to ask.

The churn of senior executives in some of Australia’s major sporting organisations seems likely to continue unless fundamental governance and cultural issues are proactively addressed. Greater efforts must be fast-tracked, and with further turnover of AFL executives expected in the coming months, as well as high-profile executive searches ongoing at other major sporting organisations, there is an opportunity to lead Australia’s sports governing culture to a new beginning.

This article has been reproduced from The Governance Institute website, and first appeared on 17 May 2023.

Latest newsRSS