At what point does it become obvious that an organisation is in crisis and that urgent action is required.
The litany of governance issues which have beset the Brumbies organisation in the last 12 months reads like a fiction story. That these are real events in the history of a great organisation is a demonstration of an abject failure of governance by the Board, led by the Chair.
For the Chair, it is time to accept responsibility and for the good of the game, and as the leader of the organisation, to step down.
It is with some distress that I have come to this point and I should state that I do so with some background in the Brumbies and Australian Rugby generally. My background is well known as a player, administrator at state, national and international level and is set out below.
With this background in mind, my opinion of the governance failures (in no order) are summarised as follows:
- Seeming inability to control the actions of the CEO;
- Referral of the KPMG report regarding the activities of the organisation with scan regard to the Chair’s membership of the Union’s Finance Committee throughout the period covered by the report. (Question – if he didn’t know about the deal(s) at the time then why not? Did he ask?? If he did ask and was not satisfied with the answers what was his response and why did he remain a member of the committee – this has never been addressed or answered to the satisfaction of members and stakeholders);
- Appointment by the Chair of a former professional associate of the Chair to a position on the Finance Committee (I am told as Chair of the committee) without reference to the members of the Board – In light of 2 above this constitutes a real or perceived conflict of interest;
- Absence of organisational integrity associated with the referral of the report to the AFP which was made without the prior referral to former long standing officials of the organisation (and especially as they had negotiated the deals) or UC. I am advised, by the parties that they were willing to answer any questions had they been put to them. The pre-emptive referral of the report fails the fairness test at any level and I suspect will fail scrutiny of the report itself;
- Breakdown of stakeholder relations throughout the organisation most especially with UC;
- Breakdown in the relationship with the ACT Government and its officials which have long supported the organisation no matter the political party in power;
- Disaffected members at all levels of the organisation (season tickets holders of long standing, Foundation Members and generally those attending games;
- Poor communication to stakeholder groups by the Chair;
- Chair overseas on holidays at a critical time for the organisation both on and off-field when leadership was critical;
- Void in leadership especially by the Chair during critical time when leadership was required by the members and the broader stakeholder group;
- Overseeing the shambolic negotiations regarding the termination of the CEO;
- The retention of a Director for many months who had been subject to comments from a Judge of the Supreme Court as to his honesty and who was the Director of 2 failed companies owing money to the ATO and for employee superannuation (since recently resigned after much resistance from the Chair);
- Formation of a Nominations Committee without transparent Terms of Reference and by appointing members with little if any experience in the administration of the game or high performance as it relates to Rugby and proceeding without proper, if any, communication with his Board;
- Leaving out long standing partners to “carry the can” by not negotiating a complete end to the legal dispute with the CEO (which continues) to the on-going cost of those who and which remain involved. This on-going dispute continues to cause damage to the relations between the parties involved;
- The Union continues to incur legal costs associated with the dispute as a direct consequence of the settlement strategy adopted by the Chair and the Board which did not finalise all the outstanding issues being limited to a resolution of the dispute between the Union and the former CEO;
- The creation of Brumbies TV at considerable cost to the Union with an apparent failure of the assumptions of the business plan to support the additional expenditure;
- The failure to commence the recruitment process for the CEO in a timely manner. The delay indicates the absence of understanding by the Board relating to the critical times in sponsors budgetary processes and will create an enormous challenge to an incoming CEO;
- An organisation which fails to apply a values standard to decisions – there is no Values Statement on the Brumbies Home Page – it seems obvious that decisions are made without reference to the values long important to the organisation and its standing in the community;
- In spite of additional revenue of in excess of $1.4m received from the ARU, it appears the budget projections will not be achieved and again the organisation will most likely post a deficit. This will occur in spite of having successful on-field performance which included a home qualifying final.
The HPU, Community Rugby, coaching and development staff have continued to deliver in what must have been difficult circumstances. The Brumbies on-field performance is remarkable considering what was going on around the organisation. They should all be commended.
I can summarise the governance and organisational breakdown in one statement –
“The Brumbies do not treat those associated with the organisation in the manner they have been treated.”
All of this should also be seen in the broader context of the crisis of rugby in this country. The current funding model is not sustainable. This is generally “code” for less funding from and more control by the governing body (the ARU). The “code” however generally excludes NSW and Queensland from the equation – we will see.
The ARU are in the process of either taking control or encouraging private investment. The absence of a sponsor for the June Test series against the English and the cessation of the sponsorship deal by Asteron Life for the Super Competition at the end of the current season, will place further pressures on the ability of the ARU to fund the Super Unions.
Yet the Brumbies remain in a stalemate with an organisation (UC) and other stakeholders which if not resolved and relationships not re-established will result in the loss of control to the ARU as the only available option.
It need not be the case.
I understand it has been made very clear to the Chair some months ago that stakeholders have lost confidence in his ability to lead the organisation. While he stays, crisis will continue and will not be resolved. The actions of the Chair of the Essendon Football Club are offered as an example and who for the good of the club resigned. I implore the current Chair of the Brumbies to follow this example and go – .
Peter J McGrath
For the record the writer provides the following:
Director the ACT & SNSW Rugby Union 1994 to 2005 (Chairman 1999 to 2005);
Director of the Australian Rugby Union 2005 to 2012 (Chairman 2007 to 2012)
Member of the Executive Committee of SANZAR 2006 to 2012 (Chair 2006/2007 and 2012)
Member of the iRB (now World Rugby) Council and Executive Committee (2008 to 2012)