€250k to €2.5m:Returns on Good Governance

September 2011

“Good Governance -The Road to Sporting Success”

Sport and

Recreation Alliance

The Batting Order

Background

Process of change

New structure

Conclusions

Background

Good Governance

“The system by which companies are directed and controlled.

“Openness and accountability are the watchwords, and ethical standards are the basis on which lasting governance systems are built.”

- Sir Adrian Cadbury

Background

Governance/commercial model

2005• Irish Cricket Union – unincorporated entity• Executive Committee – 18 people – fully representative• 3 on payroll – including one P/T• no contracted athletes/players• Turnover - €260,000• Commercial revenue - €104,000• Website traffic – 930,000 (for the year)

2011• Cricket Ireland – incorporated business• Board – 11 Directors – representative and independent• 21 on payroll – 11 F/T; 5 P/T; 5 consultants• 13 contracted athletes/players• Turnover (projected) - €2.9 million• Commercial revenue - €1,370,000• Website traffic – 9,220,000 (to end August)

Background

2003-6 – first CEO

Funding model – dominated by public hand-outs

Limited playing success

CEO departs

ICU soul-searching – CEO or not?

Background

CWC 2007 – on the map

How to capitalise on success and move forward? Strategic consultancy – paid for by Sports Council

Best practice principles

How can we be better?

Process of Change

Outline proposals – radical

Develop plans in: Governance Business/Administration High Performance

Process of Change

Starting point

Identify stakeholders

Internal and external consultation

Key questions:What is current situation?Is change necessary?What is ‘best practice’?How do we tailor this to Irish Cricket?

Process of change

Killer phrase – consultant’s paper:

“One of the key issues for a governing body is having the authority and credibility to be able to lead and govern the sport in an increasingly complex environment. The Irish and international sporting landscape has changed considerably in the last 5-10 years. A governing body has many regulatory, commercial, fiduciary, legal and policy obligations compared to other, simpler eras. It is important that the ICU governance is sufficiently robust to deal with these complexities and can maximise the opportunities available to the sport, while maintaining and strengthening existing structures and relationships.”

Process of change

Key arguments (the ‘what’):

Best practice Limit of financial liability Guarantees expertise on Board Support from key funding partners Withstand external scrutiny Timing – golden opportunity to change

Process of change

Selling-in process (the ‘how’)

Avoid alienating existing expertise – volunteer drop-off

Current group – instrumental in getting game tocurrent state

Current group – critical in laying foundations forfuture and leaving legacy

Consultant to deliver – independent expert

Process of change

Agents of change (the ‘who’)

New CEO – new blood; no axe to grind

Key volunteers – Chairman/Finance/Hon Sec

Independent, experienced consultant

External funding for process – Govt/ICC imprimatur

Possible new sponsor?

Process of change

Timelines (the ‘when’)

• April 2007 – idea genesis/internal support• May – ISC agrees to support process/agency engagement• June/July – stakeholder consultation• August – drafting of papers• September – final drafts to ICU management• October – debate/decision by Executive Committee• October/November – drafting of Memo & Articles• November/December – Board composition debate• January 2008 – approval of M&A; Nominations Committee• February – last AGM of ICU/EGM of ICU Ltd• March 2008 – first meeting of new company Board

New structure

The Board

11 people

Chair, plus 6 from cricket constituency and 4 ‘independents’ – local knowledge/external expertise

Majority – experience of leading/managing cricket

Chair – at least 3 years in last 10 lead/manage cricket

‘Cricket’ nominees – one mandatory; plus one mandatory or desirable

Composition skills-based; also reflects geographical diversity of game

Acting in best interests of the company

New structure

Desired skills-experience

Mandatory Requirements • Experience of leading/managing cricket in Ireland (at Board/Executive level in the ICU or a Provincial Union) • Experience of Irish international cricket (as player, coach, manager or selector) • Experience of managing a growing business • Board level accountancy/finance experience • Access to a wide range of business/sporting/political contacts • Experience of raising finance for sporting organisations  Desirable Requirements  • Media experience • Legal experience – company and/or sporting • Experience of representative women’s cricket (as player, coach, manager or selector) • Experience of leading and developing volunteer networks • Experience of sports education • Experience of marketing major sporting events • Experience of internal audit/risk management

New structure

Board-Management engagement

• CEO runs the business – Board to provide advice, guidance and support

• Board makes strategic decisions based on management recommendations

• Two-way communication – constituent views to Board and vice-versa

• Regular communication between CEO and Chairman

• Regular communication between CEO/Senior Management and sub-committee Chairs (Cricket and Finance)

• Independent Directors – advice in legal, commerce, finance, discipline, HR

New structure

Legacy of change

Inherently good: smaller numbers at Board = focused discussions external expertise valuable for business/legal/financial advice management empowered creates environment for on-field performance

Looks good: perception is reality stakeholder confidence in model – players; committees; media; staff etc

Public funder confidence less compliance more likely to receive additional funding

Commercial opportunities RSA perception

New structure

The virtuous circle:

Reform governance, therefore...

Everyone points in the same direction, therefore...

Board puts team at the centre of policy, therefore...

Resource flows to team, therefore...

Team becomes successful, therefore...

Success attracts profile, therefore...

Profile attracts revenue, therefore..

More resources to team, therefore...

More success...

Conclusion

Governance change isn’t just worth it, it’s necessary

Not rocket science, but takes time

Improves organisation

Improves perception of organisation

Attracts public funding

Attracts private funding

Facilitates team performance

Demonstrates desire to improve

Thank You

Any Questions?