A Code For Sports Governance

Friday 25th November 2016

On 31 October 2016, UK Sport and Sport England jointly published ‘A Code for Sports Governance’ (the “Code”).

The Code will apply from April 2017 to all organisations within the UK to whom UK Sport and Sport England provide grant funding, whether for grass roots or elite sport, regardless of size and sector, including national governing bodies, clubs, charities and local authorities.

The Code comes at a time when sport and its governance is under increasing public scrutiny. According to UK Sport and Sport England, the introduction of the Code will mean that organisations in the UK seeking public funding for sport and physical activity must “meet new gold standards of governance considered to be among the most advanced in the world”.

The Code sets out the levels of transparency, accountability and financial integrity that will be required from organisations seeking public funding. At the heart of the Code are five basic principles of good governance:

• Structure – organisations shall have a clear and appropriate governance structure, led by a Board which is responsible for the long-term success of the organisation;

• People – organisations shall recruit and engage people with appropriate diversity, skills and experience;

• Communication – organisations shall be transparent and accountable, engaging with stakeholders and be internally democratic;

• Standards and conduct – organisations shall uphold high standards of integrity and engage in regular and effective evaluation to drive continuous improvement; and

• Policies and processes – organisations shall comply with all applicable laws and regulations, undertake financial strategic planning and have appropriate controls and risk management procedures in place.

The Code seeks to strike a balance between requiring high standards of governance whilst not wanting to over burden organisations with unnecessary bureaucracy or deterring small organisations from applying for public funding.

In an effort to achieve this, UK Sport and Sport England recognise that the size of the funding to be made available will differ. Therefore UK Sport and Sport England intend to adopt a proportionate approach to the application of the Code by creating three “Tiers” of funding. Each Tier has a different level of mandatory governance “Requirements”:

• Tier 1 – represents the minimum level of mandatory governance Requirements (for example, the organisation is properly constituted, has a clear purpose and if membership based, is inclusive and accessible and the governing committee meets regularly and decision making is recorded). UK Sport and Sport England will generally categorise a grant of funding as Tier 1 if it is granted on a one-off basis and the total amount of funding is less than or equal to £250,000;

• Tier 2 – organisations receiving funding categorised as Tier 2 will be expected to meet all of the mandatory Requirements in Tier 1 and have in place some additional mandatory Requirements from Tier 3. The exact Tier 3 Requirements to be met for Tier 2 funding will depend on the nature of the funding and the circumstances of the organisation (e.g. its resources). It is expected that investments falling into Tier 2 are likely to be in the region of £250,000 – £1,000,000; and

• Tier 3 – represents the top level of mandatory governance Requirements in the Code because of the significant funding to be made available (i.e. the total amount of the funding is greater than £1,000,000 and is likely to be granted over several years).

Examples of Tier 3 Requirements include, a maximum Board size of 12 persons (unless otherwise approved by UK Sport and Sport England), the organisation must maintain an up-to-date skills matrix detailing the experience of its Board, maximum terms for Board members, the role of chairperson and CEO must be filled by different people, at least 25% of the Board shall be independent non-executive directors, the appointment of the chairperson and independent non-executive directors must be via an open, publicly advertised recruitment process and the organisation must adopt a target of and take all appropriate action to encourage a minimum of 30% of each gender on its Board.

It is clear that the Code heralds a new era in accountability and transparency in sports governance in the UK. According to UK Sport and Sport England, separate guidance will be provided on how compliance with the Code will be monitored and assessed.

Many organisations will already have appropriate structures, policies and procedures in place and operate in compliance with the Code. However it is likely that the Code will pose certain challenges for many organisations as they will need to draft, agree and implement a wide range of policies/procedures and other documentation to ensure their organisation meets the Requirements of UK Sport and Sport England set out in the Code applicable to the level of funding required to further develop their sport.

If you would like any more information on any of the points raised above or any advice in connection with the Code, please contact:

David Bentham (Partner) – Email: davidbentham@centrefield.law or

Deirdre McCarthy (Associate) – Email: deirdremccarthy@centrefield.law

Telephone – 0161 672 5450

Please note the information contained in this briefing is intended as a general review of the subject featured and is not intended as specific legal advice.

Centrefield LLP – About Us

We are a specialist Sport and Media law firm based in Manchester. Our team has over 15 years’ experience advising exclusively in the sport and media sector.

We have extensive experience of advising national governing bodies (NGBs), international federations, sports clubs, teams and county sport partnerships.

Our work for NGBs spans a wide range of areas including advising on sponsorship/partnership agreements, licensing/merchandising arrangements, kit and other product/service supply arrangements, broadcasting, digital and social media, funding arrangements (including UK Sport/NGB funding agreements and NGB agreements with their respective funded athletes), team member agreements, all aspects of events (including bidding for events, sanctioning/organisation of national and international events, event sponsorship and terms and conditions of participation). We also advise governing bodies on matters such as governance, disciplinary issues, immigration matters, selection issues, challenges and dispute resolution.