Good governance in sport: a survey of UK national governing bodies of sport

Abstract

This report presents the findings from a research project focusing on the governance
of national governing bodies of sport (NGBs) in the UK. Governance has become an
increasingly important issue that NGBs in the UK have had to address over the last
decade due to examples of poor management, financial failure, and increased public
funding for sport that have resulted in the need for more professional sports
administrative structures. These issues have been addressed during the last decade
by UK Sport and the Sports Councils as part of a Modernisation Programme aimed
at improving NGB governance.
The objective of this research project was to analyze standards of governance at UK
NGBs and consider the extent to which some of the recommendations from the
Modernisation Programme have been implemented. It is hoped that this will be the
first of an annual research project focusing on these issues and that future reports
will be able to track trends and changes in the way that NGBs are governed in the
UK. The research took place between October 2009 and January 2010 and has
been carried out by a team of three researchers from the Birkbeck Sport Business
Centre, a research centre in the Department of Management at Birkbeck, University
of London. The research team carried out an online survey in which all NGBs
recognised by each of the four home country sports councils – Sport England, Sport
Northern Ireland, sportscotland and the Sports Council for Wales – were invited to
take part. The findings of the report are based on responses provided by 60 NGBs.
The report presents detailed analysis of three key areas relating to NGB governance:
the board and committee; human resource management; and stakeholder
management and corporate responsibility.

Full text

Good Governance in Sport:
A Survey of UK National Governing Bodies of Sport
Birkbeck Sport Business Centre
April 2010

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Report Authors
Dr Geoff Walters
Geoff completed a BSc in Management at Lancaster University and an MA in Labour
Studies at the University of Manchester before joining the Football Governance
Research Centre at Birkbeck in 2003 as a Research Officer. He was involved in four
annual State of the Game publications that evaluated standards of corporate
governance in the football industry. Geoff received a three-year PhD scholarship
from the Economic and Social Research Council in 2004 to undertake a stakeholder
analysis of the football industry. Drawing on qualitative case study analysis, the
research considered the ways in which football clubs manage different stakeholder
relationships. He was awarded his PhD in 2007 before joining the Department of
Management at Birkbeck as a lecturer. His main research interests are corporate
social responsibility in sport and governance and regulation in sport.
Dr Linda Trenberth
Linda joined Birkbeck in 2000 from Massey University in New Zealand. She gained
her first degree in Education before taking an MA (Applied) in Recreation and
Leisure Management. Linda was involved in setting up what is now the leading Sport
Management Programme in New Zealand in the College of Business at Massey
University. In this area Linda also contributed to and co-edited with Chris Collins the
first and only texts in Sport Management in Australasia in 1994 and 1999, and more
recently in 2005. She has also more recently published a sport business
management text for the UK. Linda gained her PhD in 1997 which explored the
relationship between work stress levels and leisure involvement in a large group of
managers. Linda has recently completed a psychology qualification and her research
and consulting interests include the management of the employee-employer
relationship and performance, women in management, as well as work stress, health
and work-life balance, career management and sport management.
Richard Tacon
Richard is currently undertaking a PhD at Birkbeck in which he is evaluating the
impact of voluntary sports clubs on social capital. He previously completed an MSc
in Sport Management and the Business of Football at Birkbeck in 2004, prior to
which he had received a BA Hons in Classics at the University of Cambridge. In
2005, Richard joined the Football Governance Research Centre as a Research
Officer, where he was involved with the annual State of the Game publications in
2005 and 2006. Richard became Research and Evidence Officer at the Central
Council of Physical Recreation, the umbrella organisation for the national governing
bodies of sport in the UK, where he worked until 2008. Here, he commissioned a
survey of voluntary sports clubs in 2007 and authored a substantial policy-related
literature review of the impact of sport on the UK Government‟s priorities. He also
provided the secretariat for the Sports Volunteer Research Network. Richard‟s main
research areas are the social impacts of sport and evaluation within sport.
This report should be referenced as Walters, G, Trenberth, L and Tacon, R (2010)
Good Governance in Sport: A Survey of UK National Governing Bodies of Sport,
London: Birkbeck Sport Business Centre

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Contents
Executive Summary 4
1. Introduction 7
2. Methodology 11
3. The Board and Committee 14
4. Human Resource Management 25
5. Stakeholder Management and 36
Corporate Responsibility
6. Conclusion 47
7. Recommendations 49

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Executive Summary
This report presents the findings from a research project focusing on the governance
of national governing bodies of sport (NGBs) in the UK. Governance has become an
increasingly important issue that NGBs in the UK have had to address over the last
decade due to examples of poor management, financial failure, and increased public
funding for sport that have resulted in the need for more professional sports
administrative structures. These issues have been addressed during the last decade
by UK Sport and the Sports Councils as part of a Modernisation Programme aimed
at improving NGB governance.
The objective of this research project was to analyze standards of governance at UK
NGBs and consider the extent to which some of the recommendations from the
Modernisation Programme have been implemented. It is hoped that this will be the
first of an annual research project focusing on these issues and that future reports
will be able to track trends and changes in the way that NGBs are governed in the
UK. The research took place between October 2009 and January 2010 and has
been carried out by a team of three researchers from the Birkbeck Sport Business
Centre, a research centre in the Department of Management at Birkbeck, University
of London. The research team carried out an online survey in which all NGBs
recognised by each of the four home country sports councils – Sport England, Sport
Northern Ireland, sportscotland and the Sports Council for Wales – were invited to
take part. The findings of the report are based on responses provided by 60 NGBs.
The report presents detailed analysis of three key areas relating to NGB governance:
the board and committee; human resource management; and stakeholder
management and corporate responsibility. Specific recommendations include:
The Board and Committee
The number of board or committee members should be no more than 10
NGBs must consider appointing at least one independent non-executive director
from outside the sport to their board or committee
The board or committee should be involved in decisions on hiring senior staff

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NGBs should implement an induction procedure for new board/committee
members that sets out the role of the board and includes terms of reference,
code of conduct, statutory duties, and director responsibilities
NGBs should provide appropriate and relevant training for board/committee
members
NGB boards should nominate one individual responsible for evaluating annual
board performance
The chair of the board/committee should undertake annual appraisals of
individual board members
NGBs need to consider the development of a marketing strategy
The board/committee needs to delegate operational issues to NGB staff
The board/committee should develop a risk management policy
All NGBs should have Sport Resolutions written into their statutes/constitution
Human Resource Management
NGBs should be encouraged to deploy HRM in a more sophisticated way through
the Competency Framework
There is a need to identify barriers preventing NGBs from implementing what
appear to be more effective practices
NGBs should build a sound participatory base that rewards, recognises and
empowers both volunteer and paid employees
NGBs should provide support and training programmes to assist with the
development of more strategic and formal HR practices
NGBs need to provide developmental training for all levels including board
members, paid staff and volunteers
NGBs need to consider developing a method for measuring the importance of
investing in human resources in sport organisations
Stakeholder Management and Corporate Responsibility
NGBs should undertake a mapping exercise and identify their stakeholders
according to the level of power they wield and the level of interest they have in
NGB governance

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NGBs should seek to implement stakeholder engagement and stakeholder
participation strategies appropriate to the position of stakeholders on a
power/interest matrix
All NGBs should bring key stakeholders to the board/committee to improve
stakeholder representation
Where NGBs are involved in corporate responsibility, the objectives must be
clear from the outset in order to evaluate impact

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1. Introduction
The election of the Labour Government in 1997 brought an increased focus on the
organisation, administration and management of sport organisations. In part this was
due to instances of poor management and failures in organisational governance. It
was also a reflection of the increased level of public funding for sport, particularly
following the introduction of the National Lottery in 1994, which has resulted in the
need for sports administrative structures to move from amateurism to
professionalism (Henry and Lee, 2004). Moreover, it reflected the increasing focus
on sport as a means to deliver Government policy, with sport seen as a way to target
issues such as social exclusion, obesity and health, anti-social behaviour, and youth
crime. This has led to sport policy being taken more seriously by politicians, and like
many other areas of public services, increasingly the organisational structure of sport
has been subject to modernisation reforms (McDonald, 2005) as part of an ongoing
process to improve effectiveness and efficiency.
1.1. Modernisation in Sport
Since 2000, both Sport England and UK Sport have undergone numerous structural
changes in the drive toward modernisation. Underpinning the modernisation agenda
has been the desire for Government to devolve responsibility to Sport England and
UK Sport. Such reforms have been perceived as necessary to increase the
accountability and autonomy of Sport England and UK Sport although it has led to
the increasing ability of Government to influence the strategic direction of these two
organisations through the introduction of targets, measurable outcomes, Key
Performance Indicators, and the need to demonstrate compliance with certain
standards (Houlihan and Green, 2009).
While both Sport England and UK Sport have had to demonstrate that they are „fit for
purpose‟, national governing bodies of sport (NGBs) have also come under
increasing scrutiny to modernise. NGBs have a varied role. They have been
described as custodians of their sport (UK Sport, 2003) and their responsibilities are
widespread, and include, but are not limited to strategic planning, promoting the

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sport, overseeing the rules and regulations, increasing participation, and developing
talent. Modernisation, in the context of NGBs, has been defined as “the process of
continuing development of a Governing Body towards greater effectiveness,
efficiency and independence” (UK Sport, 2003: 1). This was first reflected in A
Sporting Future for All, a policy document released by the Department for Culture
Media and Sport (DCMS) in 2000, within which there were some key
recommendations relating to the governance of NGBs. The Government stated that
NGBs would receive increased control over the allocation of public funding on the
proviso that NGBs become more accountable by modernising administration
structures and practices, and implementing robust management, planning and
monitoring of all activities (DCMS, 2000). NGB modernisation was further advocated
in Game Plan (DCMS, 2002), where it was clearly reiterated that Government
investment should be used to drive modernisation and that NGBs should have clear
performance indicators that can be used as the basis on which to determine funding.
1.2. NGB Modernisation Programme
To support the modernisation process, the Government announced in 2001 that it
would provide £7m in funding, managed through UK Sport, as part of a NGB
Modernisation Programme (DCMS, 2002). The objective of the Modernisation
Programme was to “help NGBs to improve their organisation, the skills of their staff
and volunteers, and the standards of their policies and procedures” (UK Sport, 2004:
1). Between 2001 and 2005, UK Sport invested £5m of government funding into 114
NGB projects across the UK as part of the Modernisation Programme (Houlihan and
Green, 2009: 18). In 2003 a high-level review of the Modernisation Programme –
Investing in Change – was undertaken with two key objectives: to identify the
optimum models for NGB performance; and to develop change management action
plans to guide NGB performance (UK Sport, 2003: 5).
Investing in Change made it clear that modernisation was an ongoing process in
which NGBs would be provided with support to improve their administrative
structures to increase efficiency and effectiveness. It was argued that this would help
to increase participation, develop talent and deliver elite success (UK Sport, 2004).
However a number of key challenges that NGBs faced were noted, one of which was

9
poor corporate governance related to a lack of transparency, financial controls, and
monitoring and reporting (UK Sport, 2003: 34-39). As a result, effective corporate
governance was identified as a key success factor that formed part of the
Competencies Framework (a tool for NGBs to use to benchmark their modernisation
process) and included a number of key elements such as risk management;
transparent financial disclosure; effective financial controls; compliance with laws
and regulations; management structure; a long-term strategic plan; strategic review
procedures; and the role and responsibility of the Chief Executive (UK Sport, 2003:
48).
The Competencies Framework is a clear example of the move towards NGBs having
clear performance indicators that can be used as the basis on which to determine
funding. Since the report by UK Sport, Sport England and UK Sport now require that
all funded NGBs have to meet certain standards relating to corporate governance in
the areas of strategic planning, financial management, human resources and
organisational policy in order to receive funding. The sports councils and UK Sport
also work together to ensure that NGBs take part in an annual self-assurance
process which provides the basis on which funding is determined. This self-
assurance process has encouraged NGBs to work towards increasing autonomy and
responsibility as part of the modernisation process (Houlihan and Green, 2009).
Further developments took place in 2007 when UK Sport launched „Mission 2012‟,
which focuses on the performance of Olympic Sport NGBs in three areas in the build
up towards the London 2012 Olympic Games: athlete success and development;
performance system and structures; and governance and leadership. The aim of
„Mission 2012‟ is to continually monitor NGB performance in relation to the three
areas and to evaluate standards based on a traffic light system – those NGBs that
are given a red rating face the potential withdrawal of funding or UK Sport
intervention. The focus on governance and leadership requires that NGBs have in
place appropriate structures and clearly can be seen as a continuation of the NGB
Modernisation Programme.
1.3. The Objective of the Report

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This survey into corporate governance at NGBs has been carried out in the context
of modernisation in sport and the development of the Modernisation Programme at
UK Sport and the self-assurance process. While Investing in Change developed a
series of recommendations to improve NGB governance, the report stated that the
ultimate aim was for NGBs to implement modernisation within two-three years (UK
Sport, 2003: 53). This independent survey provides an analysis of standards of
governance at UK NGBs and considers the extent to which some of the
recommendations from the Modernisation Programme have been implemented.
Specific issues that the survey considers include the role and composition of the
board; board performance; strategic planning; human resource management and the
expertise of the management team; staff training; stakeholder relations and
corporate responsibility.
The report concludes with a number of recommendations to help NGBs improve
standards of governance. However there are two key issues that have to be
recognised in relation to the recommendations. Firstly, there are over 300 NGBs
recognised by the four Sports Councils in the UK and as can be seen in chapter two,
there are large variations in size, turnover, organisational structure, and the number
of member clubs and individual members. Not all recommendations will be relevant
for all NGBs and there will be many examples of NGBs that already follow best
practice guidelines in line with the recommendations. It is therefore hoped that the
recommendations serve to provide a checklist for NGBs to consider and implement
where relevant rather than taken to be a one-size fits all strategy. Secondly, the
recommendations do not in themselves provide a guaranteed solution to improve
NGB effectiveness but instead provide best practice guidance that can help an NGB
to implement a governance framework that provides the necessary conditions for
success.

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2. Methodology
2.1. Scope of the Survey
The information for this report was collected through an online questionnaire that
included questions on boards and committees, human resource management,
stakeholder management and corporate responsibility. The questionnaire comprised
both closed („tick-box‟) and open questions. This meant that a large amount of data
could be collected and also that respondents had the opportunity to provide detailed
answers where appropriate.
All national governing bodies of sport recognised by each of the four home country
sports councils – Sport England, Sport Northern Ireland, sportscotland and the
Sports Council for Wales – were invited to take part in the survey. This provided an
initial „population‟ of 306 NGBs1. After further investigation, this population was
revised on account of the following issues:
NGBs that had been, or were currently, involved in mergers (3)
NGBs that declined to take part in the survey because they deemed it
inappropriate for the size of their organisation (7)
NGBs that could not be contacted (5)
The revised population for this survey, therefore, was 291 NGBs. Each of these was
contacted by email and/or telephone on at least three occasions between October
2009 and January 2010. On each occasion, the NGBs were informed about the
purpose of the survey, invited to take part and assured that their response to the
questionnaire would be anonymous. 60 NGBs completed the online questionnaire,
giving an overall response rate of 21 percent, which is reasonably good for a detailed
survey of this type. Table 2.1 provides a breakdown by country of the NGBs
surveyed and those that responded.
1 This is the total number of recognised NGBs drawn from the four home county sports council
websites on 1/10/09.

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Table 2.1: A breakdown of the population of NGBs and respondents
Sports council
Number of recognised
NGBs (in revised
population)
Number of NGBs
that responded
Response
rate (%)
Sport England
118
33
28
Sport Northern
Ireland
60
9
15
sportscotland
63
14
22
Sports Council
for Wales
50
4
8
291
60
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2.2. Analysis of the Data
The data from the online questionnaire were entered into SPSS, a software package
designed to enable statistical analysis. This preserved the individual detail of the
responses and, where relevant, allowed direct quotations from the open questions to
be identified. Quantitative data were analysed using SPSS and qualitative data were
coded by issue and analysed manually.
2.3. Describing the Respondents
The respondents were asked for information on turnover, number of full-time and
part-time employees, number of member clubs and number of individual members
where appropriate. This enables a picture to be built up of the NGBs that responded
to the survey. Table 2.2 provides a breakdown of these respondents2. It shows that
there are clear differences between the NGBs with six respondents having a
turnover of more than £5million in contrast to 20 respondents that had a turnover of
less than £200,000. There is also a clear and obvious trend whereby NGBs with the
highest turnovers also, on average, have the greatest number of full-time staff,
member clubs and individual members. It is important however to keep in mind the
fact that NGBs vary so much in size as certain aspects of governance may be more
relevant to some NGBs than to others.
2 One NGB respondent declined to reveal their turnover. For this reason they do not appear in table
2.2.

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Table 2.2: Description of respondents
Turnover
Number of
respondents
Average
number of
full-time staff
Average
number of
paid part-time
staff
Average
number of
member
clubs
Average
number of
individual
members
Over £5m
6
154
22
1,372
178,070
£1m - £5m
13
22
6
712
97,227
£500K-£1m
8
12
3
628
29,125
£200K-£500K
12
4
2
165
13,235
Under £200K
20
1
3
50
1,873

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3. The Board and Committee
In the context of modernisation, in which NGBs are encouraged to professionalise
their administrative structures to increase efficiency and effectiveness, the role of the
board of directors or the committee is central to NGB governance. The
board/committee of an NGB has a broad range of functions including leadership,
decision-making, representation and accountability (UK Sport, 2004: 4). More
specifically, effective corporate governance requires that the board/committee takes
responsibility for issues including strategic planning, policy formulation, legal
compliance, management of financial resources, stakeholder management,
recruiting senior management and reviewing performance, monitoring the overall
performance of the NGB, and managing risk. Out of the 60 NGBs that responded to
the survey, 78 per cent indicated that they were governed by a board of directors
and 22 per cent were governed by a committee. This chapter details the findings
from both NGBs governed by a board of directors and those that are governed by a
committee. It presents the findings in relation to structural characteristics including
the size and composition of the board, and process characteristics including the role
of the board, induction and professional development, board evaluation, NGB
strategy, and risk management.
3.1. Board/Committee Size and Composition
The way that boards and committees are structured can have a significant impact on
their ability to govern an NGB effectively. It is important that NGB boards/committees
avoid being too large and unwieldy as this can result in ineffective decision-making.
UK Sport (2004) recommends that the board of an NGB should consist of between
five and 10 directors, excluding the position of Chair. The survey results revealed
that the average number of board/committee members was 12 while 11 out of 12
board members were volunteers rather than paid executives (table 3.1). This is
higher than the recommendations laid out by UK Sport (2004). In addition, 15 per
cent of respondents had 20 or more board members. It is clear that there is a need
for some NGBs to reduce the number of board/committee members. However while
UK Sport also stated that board size should reflect the size of the organisation and
the level of activity it undertakes, no significant relationship was found between

15
board size and a number of variables including turnover, number of full-time and
part-time employees, number of member clubs and individual members. UK Sport
(2004) also suggests that there should be a maximum of three non-executive
directors recruited from outside the sport that possess skills and experience of use to
the NGB. Table 3.1 reveals that the average number of non-executive directors on
NGB boards was five. While this would appear encouraging, it must also be noted
that 47 per cent of NGBs in the survey did not have a non-executive director on the
board. Therefore it is clear that many NGBs must consider appointing individuals
from outside the sport to their board or committee. Table 3.1 also indicates that the
average number of board/committee meetings was seven with 78 per cent of NGBs
stating that that they felt there are an adequate number of board/committee meetings
compared to just 8 per cent that disagreed.
Table 3.1: Board size and composition
Turnover
Board
Members
Volunteers
Non-executive
Directors
Board
Meetings
Over £5m
16
13
13
6
£1m - £5m
10
9
5
6
£500K-£1m
10
9
2
8
£200K-£500K
11
10
7
9
Under £200K
13
13
2
7
Overall
12
11
5
7
3.2. The Role of the Board
Setting out the objectives and the multiple roles that the board undertakes is a key
issue for an NGB. The survey results revealed that at 70 per cent of NGBs the board
has a clear understanding of its duties and responsibilities compared to only 8 per
cent that stated otherwise. Moreover it was revealed that 72 per cent of NGBs felt
that the board played a key role in the achievement of NGB objectives. More
specifically, the survey asked NGBs to identify which roles were important to the
board/committee. Chart 3.1 reveals the results. It shows that there is a clear focus on
financial issues with 52 per cent of NGBs stating that setting financial policy was a

16
very important role for the board and a further 30 per cent stating that it was
important. In addition, 66 per cent of NGBs overall stated that budget allocation was
either important or very important and 64 per cent revealed that raising funds is
either important or very important. Planning is also important for the board/committee
with 74 per cent and 71 per cent of NGBs overall responding that long-term planning
and program development are either important or very important roles for the board
respectively.
Chart 3.1: Percentage of NGBs that stated the following roles were important
to the board
Interestingly, although hiring senior staff is typically considered a role for the board,
only 51 per cent of NGBs stated that this was an important or very important role.
Moreover only 39 per cent of NGBs saw that developing a human resource strategy
was an important or very important role for the board. Given that recruiting people
with sufficient skills and expertise is a key aspect of the Modernisation Programme, it
appears that this has yet to be implemented at the board/committee level at the
majority of NGBs. While it would be reasonable to conclude that a human resource

17
strategy is not an important issue for the boards or committees of small NGBs that
only have a handful of full-time members of staff (35 per cent of NGBs in the survey
had four or fewer full-time members of staff) the survey revealed that it was also the
case for larger NGBs. For example, only 33 per cent of NGBs with more than 25 full-
time employees reported that a human resource strategy was an important or very
important issue for the board.
It has been reported that the move towards professionalism at senior management
level within NGBs has increased the potential for conflict over who is able to
influence the decision-making process (Hoye and Cuskelly, 2007). Therefore the
relationship between the board/committee and the full-time senior staff is particularly
important. The survey revealed that only 14 per cent of NGBs reported a lack of trust
between board/committee members and full-time staff compared to 73 per cent that
stated this was not an issue. Only 12 per cent revealed that communication between
board/committee members and full-time staff was an issue while just 12 per cent of
NGBs reported a lack of transparency.
3.3. Board Induction and Professional Development
Best practice corporate governance requires that organisations have a formal,
transparent and objective procedure when appointing new directors to the board of
an organisation. At 77 per cent of NGBs this was found to be the case. When new
board members are appointed, an induction procedure is considered important. The
survey revealed that 57 per cent of NGBs have a formal induction procedure or
training for new board/committee members (chart 3.2). Chart 3.2 also reveals that 80
per cent of NGBs provide new directors/committee members with the terms of
reference that relate to the board policies and procedures. 52 per cent of new
directors/committee members receive a code of conduct and information relating to
statutory duties. However only 27 per cent of NGBs provide a formal contract to new
directors/committee members that sets out their responsibilities. This is perhaps a
reflection of the fact that on average 11 out of 12 board members are volunteers
(table 3.1). Board members should also receive a minimum standard of training
within six months of appointment from a recognised authority (UK Sport, 2004).
However only 25 per cent of NGBs in the survey revealed that they provide training

18
for their board/committee members and only 18 per cent have a record of directors
undertaking training. The level of information provided to new directors and the need
for director training are clearly two areas where NGBs can improve standards of
governance to enable the board to perform more effectively.
Chart 3.2: Percentage of NGBs that provide the following to new board
members
3.4. Board Evaluation
A key role of the board is to evaluate board performance, both as a group and in
relation to the performance of individual directors. This provides an opportunity for
the board to evaluate its own effectiveness, to assess areas of strength and
weakness, to set standards and performance expectations based on set criteria, and
to evaluate individual member performance (Hoye and Cuskelly, 2007). The overall
objective of board evaluation is to improve NGB governance. The survey results
revealed that this is an area in which NGBs could improve as only 45 per cent
revealed that they undertake an annual evaluation of board performance and only 41

19
per cent of NGBs undertake an annual evaluation of board committees (chart 3.3).
Chart 3.3 also reveals that 45 per cent of NGBs stated that they undertake an annual
evaluation of individual directors/committee members, however only 26 per cent
have in place an appraisal procedure for individual board members. These figures
reveal that there is clearly a need for many NGB boards to put in place a procedure
to evaluate the effectiveness of the board and individual board members.
Chart 3.3: Percentage of NGBs that undertake board evaluation
3.5. NGB Strategy
A key role for the board/committee of an NGB is to determine the strategic direction
of the organisation. Although there are size and resource differences between
NGBs, strategy development is a central issue for the board and committees of all
NGBs, particularly given the increasing pressure on NGBs in the UK to demonstrate
a commitment to modernisation in order to justify funding. The survey results
revealed that 93 per cent of NGBs have a strategy in place. Of these only 80 per
cent stated that their board/committee was involved in the development of their
strategy. It is clear that at some NGBs the board/committee members need to be
more involved in strategic development. Of the 93 per cent of NGBs with a strategy,
59 per cent revealed that they had a strategy of more than three years, with 29 per

20
cent having a strategy of three years. Only 14 per cent of NGBs had a strategy of
less than three years which is encouraging. Chart 3.4 illustrates that 48 per cent of
NGBs consider that their strategy is quite well defined with 28 per cent claiming that
it is very well defined. However chart 3.4 reveals that seven per cent of NGBs did not
have a strategy and that a further 17 per cent claimed that NGB strategy was not
well defined. Moreover 27 per cent of NGBs indicated that the lack of strategic
direction was a key issue that they faced. This is clearly a concern that some NGBs
need to address going forward.
Chart 3.4: How well defined is NGB strategy (percentage of NGB respondents)
The development of a strategy is important to set out the objectives of the NGB and
the resources needed to meet the objectives. Chart 3.5 illustrates that 86 per cent of
NGB strategies set out the objectives of the NGB, with 64 per cent and 52 per cent
containing budgeted profit and loss accounts and cash flow forecasts respectively.
The survey revealed that marketing and sponsorship are key strategic issues for
many NGBs. Less than half (45 per cent) of NGBs surveyed stated that their strategy
contains a marketing plan while 47 per cent of NGBs claimed that marketing and
fundraising are key issues that the NGB faces. These figures support the findings
from Investing in Change (UK Sport, 2003) where it was found that marketing and

21
commercial advice was the second most important area in which NGBs wanted help.
Similarly only 43 per cent of NGBs have a sponsorship strategy with 70 per cent
revealing that negotiating sponsorship was a key issue and 54 per cent stating that a
lack of a strategic approach to sponsorship was a key issue.
Chart 3.5: Percentage of NGBs that consider the following issues in their
strategic plan
A key issue in strategy development is the understanding of impediments to the
development of strategic capability in NGB boards (Ferkins et al, 2005). The survey
asked respondents to describe any barriers to strategic development: a prominent
issue at many NGBs that hinders the process of strategy development was the
constraints on resources. More specifically, many NGBs reported that the
directors/committee members were unable to commit the appropriate amount of time
to properly develop the strategy of the NGB. The lack of funding and uncertainty over
sources of funding also acted as key impediments to strategy development. A further
issue that affects many NGBs is that the board of directors spend too much time
dealing with operational issues. Operational management is not an issue for the
board and there needs to be a clear separation between the board and management

22
staff. While the survey revealed that 92 per cent of NGBs said that there was a
distinction between the roles of board members and those of senior management, 54
per cent of respondents revealed that board members spend too much time dealing
with operational issues. It is clear that NGB boards and committees need to be able
to delegate operational issues to NGB staff. However this may be difficult for NGBs
with very few or no full-time staff necessitating that board/committee members get
involved with operational issues.
3.6. Risk Management
A key role for the board/committee of an NGB is risk management. The process of
risk management requires that boards are aware of potential liabilities to the NGB
and are able to manage or prevent their occurrence. The process of risk
management is a role for the board/committee of the NGB as it helps to identify
potential future events that can impact on the governance and strategic direction of
an NGB. Chart 3.5 revealed that 59 per cent of NGBs consider risk factors in their
strategic plans. Moreover, 63 per cent stated that they have a process in place to
identify risks to their NGB. The board/committee has the responsibility to implement
a risk management policy in order to reduce uncertainty. An effective risk
management policy can include the nature and extent of the risks facing the
organisation; the extent and categories of risk which it regards as acceptable for the
organisation to bear; the likelihood of the risks materialising; the organisation‟s ability
to reduce the incidence and impact on the business of risks that do materialise; and
the costs of operating particular controls relative to the benefit thereby obtained in
managing the related risks (Turnbull, 1999: point 17: 6). Chart 3.6 indicates whether
NGBs have implemented certain risk management policies. It shows that 58 per cent
of NGBs identify the extent of the risks facing the NGB and also the likelihood of the
risks materialising. It also reveals that 50 per cent of NGBs consider the financial
implications of the identified risks while 43 per cent have put in place procedures to
limit the exposure to loss of assets. However only 28 per cent of NGBs have
undertaken specific risk studies. These figures suggest that risk management is an
area in which NGBs could focus more attention.

23
Chart 3.6: Percentage of NGBs that have the following risk management
policies in place
One key aspect of risk management that has become increasingly prevalent is legal
compliance. Ensuring that NGBs are fully compliant with the law is critical to
minimise the risk of litigation. A more demanding legal and regulatory environment
has been identified as an issue affecting sport boards (Ferkins et al, 2005). It is also
an issue that has an impact on the majority of NGBs in the survey as 63 per cent
stated that legal issues have an increasing impact on the way that their NGB is
governed. With many NGBs lacking in resources to deal with legal issues, one way
in which an NGB can minimise the risk of litigation is through Sport Resolutions
(case study).
Case Study: Sport Resolutions
Sport Resolutions provides independent dispute resolution for NGBs in the UK. The
organisation is responsible for setting up panels of experts to offer arbitration,
mediation, and tribunal and administration services. In 2009 Sport Resolutions was
responsible for organising panels to deal with legal issues relating to disciplinary

24
matters, selection appeals, commercial issues, and eligibility. Sport Resolutions is
also responsible for operating the National Anti-Doping Panel, an independent body
that determines anti-doping disputes in sport in the UK. The aim of Sport Resolutions
is to make available to all sports in the UK independent, expert, timely and cost
effective resolution of all disputes and to provide information, education and training
to prevent disputes arising.

25
4. Human Resource Management
This part of the report explores human resource management and replicates
research done in Australia by Taylor and McGraw (2006). Three basic questions
guided the research: What formal HR practices are NGBs using? What are the
differences/similarities in HRM policies and practices of paid employees and
volunteers? What are the challenges influencing change in human resource
management practices for paid staff and volunteers? It has been suggested that
modern HRM practices are the most effective way of increasing performance in
modern organisations. Organisational processes specific to HRM include job design,
staffing and development, personnel evaluation, rewards, communication, leader
behaviour, power and conflict resolution (Doherty, 1998). These processes are
determined by the broader goals, structure, resources and culture of the
organisation.
HR formality is defined as the extent to which HR practices are systematised,
documented and institutionalised through documented polices, rules and regulations
(Taylor & McGraw, 2006). Huselid and Becker (2000) make the point that while it is
important to have stated polices it is also important to be able to assess actual
practices which are usually most evident in the core HR areas related to recruitment
and selection, training, performance management and reward (Truss, 2001). Taylor
and Ho (2005) noted that few sport organisations have adopted a formal HRM
strategy and HR practices are widely variable across organisations and likely to be
largely absent for volunteers. This research sought to explore these observations
with NGBs in the UK.
In answer to the question whether NGBs had a formalised human resource
management strategy/strategic plan, 33 per cent of NGBs reported that they did.
While this is greater than the figures reported in the Australian study which reported
only 26 per cent of their sport organisations as having a formal HR plan this is still
low when set against the extensive report and recommendations of the high level
review of the Modernisation programme delivered in 2003 (UK Sport, 2003). The
lack of uptake of formal HR practices is surprising given the National Governing

26
Bodies of Sport Success Criteria/Model Framework (UK Sport, 2003) which identifies
the operating standards for an NGB of a certain size. 27 of the 60 respondents in the
present study fall into category 1 or 2 of the framework so one might have expected
to see greater formalisation of the HR strategy/practices given that the these
categories are expected to have a manager for HR and staff training activities (UK
Sport, 2003:11). The Investing in Change project (UK Sport, 2003:15) lists skilled
trained and experienced key management staff, relevant training and support for
both board and volunteers and communication as key building blocks of
modernisation.
4.1. HR Practices for Paid Staff and Volunteers
Chart 4.1 illustrates the percentage of NGBs in the whole sample that replied that the
HR statement was accurate or very accurate with regard to their approach to HRM
for paid employees and volunteers. To determine whether NGBs had different
approaches to the recruitment and training of paid staff and volunteers, paired
samples t – tests were performed to chart the difference between the means for the
two sets of scores.
When looking at the HR practices used by sport organisations, the NGBs responding
showed a relatively low level of overall uptake of HR practices. The generally low
level of HR practice implementation is consistent with the view expressed by Taylor
and Ho (2005) who noted that few sport organisations have adopted a formal HRM
strategy and HR practices are widely variable across organisations and often absent
for volunteers. Statistical tests of significance conducted on the raw data in the table
below showed that there were 11 items with significantly different means between
paid staff and volunteers on comparable individual HR items. Of those 11 items 5
items were related to selection indicating that staff selection is a much higher priority
for paid staff than for volunteers among NGBs. Five further statistically significant
differences on the items between the two groups related to performance appraisal
indicating that performance appraisals, reward and development is more important
for paid staff than for volunteers and yet clearly performance appraisal and personal
development leaving aside any paid reward would be important for the motivation
and development of volunteers as well as for paid staff.

27
Chart 4.1: NGB approach to HRM (percentage of NGB respondents)
There were no statistically significant differences in training for both paid and
volunteer staff although there appears to be marginally more training for volunteers
reported than for paid staff. This may be because volunteers are “accepted” without
high levels of expertise in many cases rather than “selected” (Taylor & McGraw,
2006) so there is an implicit notion that volunteers will receive basic training.
However as the sport industry professionalises all staff will be expected to be not
only knowledgeable and passionate about the respective sport that their organisation
represents but to also have the relevant business and management skills and
expertise required for modern sport organisations. Interestingly 10 per cent of NGBs
reported that performance appraisals for volunteers were tied to personal
development which is encouraging but only 4 per cent of NGBs reported rewarding
volunteers based on performance. The percentage of respondents reporting the
statements about HR practices to be accurate or very accurate was relatively low
overall indicating a relatively low level of HR uptake generally apart from the staffing
function.

28
4.2 Effectiveness of Human Resource Management Approach
Respondents were asked to rate the overall effectiveness of their NGB‟s approach to
making human resource decisions for both paid staff and volunteers. The
percentages of NGBs reporting the extent to which their approach to HRM was
effective are presented in Table 4.1 below.
Table 4.1: Percentage reporting the overall effectiveness of the NGBs
approach to making HRM decisions
Not at all effective
Moderately
effective
Extremely
effective
Paid Staff
25
50
25
Volunteers
32
56
12
While it is important to be able to assess HR practices as well as be able to identify
whether an HR strategy is in place it is also important to be able to assess whether
the HR approach is actually effective. As might be expected, although disappointing,
only 12 per cent of respondents reported that their NGB approach to HR was
extremely effective for volunteers. Although 56 per cent reported that the approach
to HR with volunteers was moderately effective there is still much to be done from a
human resource management perspective with volunteers with 32 per cent stating
that HR for volunteers was not all effective. It may be that as volunteer numbers
have been declining there might be pressure to take on anyone rather than invest in
recruitment and selection of volunteers with the required expertise. However as
there are statutory requirements to train volunteers in relation to compliance issues
and expectations under the National Governing Bodies of Sport Success
Criteria/Model Framework for all volunteers to have job descriptions, person
specifications and induction packs for category 1 and 2 organisations, one would
expect to see greater reporting of formal and effective HR with regard to volunteers.
With only 25 per cent of respondents reporting that their HR approach to paid staff

29
was extremely effective and 50 per cent moderately effective clearly there is still
more to be done from an HRM perspective in NGBs with paid staff as well.
4.3 Proposed changes to HR approach
Respondents were asked whether their NGBs planned on making major changes to
their approach to making human resource decisions. Fifty per cent of them said no,
27 per cent yes and 23 per cent said they didn‟t know. Given the importance of
appropriate HRM attached to performance outcomes in the literature this seems
somewhat surprising and more than a little concerning and further research needs to
be conducted to ascertain why over half of the responding NGBs of sport do not plan
on making major changes in their approach to HRM when there is already minimal
investment in HRM.
The major changes the NGBs indicated that they would make in their approach to
making human resource decisions included reviewing the Staff Handbook, keeping
abreast of changes in working conditions, developing a strategy/policy and a more
systematic approach to training and reward, improving the overall approach to
managing volunteers, employing HR staff, moving to a much more people centred
agenda, better appraising and selecting Volunteer Council members, developing
volunteer strategies to include training, developing appraisal and reward systems,
planning for significant volunteer pathway programmes, moving to job evaluation,
and managing performance better. Three respondents made reference to the level
of resistance that existed within their NGB to make such changes.
4.4 Human Resource Management Challenges
Survey respondents were asked to rank the top three challenges driving the adoption
of formal HRM in their organisation. The list generated from the literature included
nine items: (1) desire to improve business results; (2) retirement of current
managers; (3) New CEO or leadership changes; (4) anticipated changes in skills of
future leaders; (5) organisation growth or expansion; (6) need for greater diversity;
(7) to increase retention; (8) to fill a vacancy; and (9) demands in the organisation
creating new skill requirements. Charts 4.2 and 4.3 present the percentage rankings

30
for the challenges driving the adoption of formal HRM for paid staff and volunteers
respectively.
Chart 4.2: Percentage of NGBs that indicated the following are challenges that
drive the need for good HRM for paid staff
We were interested in ascertaining whether the challenges driving the need for
effective human resource management were perceived to be the same for practices
concerning paid staff and volunteers. Both organisation growth/expansion and new
skill requirements were ranked highest in the top three challenges driving the need
for good HRM practice for paid staff. The third most highly rated challenge driving
change for paid staff was the desire to improve business results. This was entirely
consistent with the Australian study. In terms of volunteer HR, the drivers were firstly,
organisation growth and new skill requirements, which were identical to that of paid
staff, with the need for retention ranked third. This was different to those results
reported in the Australian study where filling vacancies left by departures was ranked
second for volunteers.

31
Chart 4.3: Percentage of NGBs that indicated the following are challenges that
drive the need for good HRM for Volunteers
Other challenges mentioned for volunteers included attracting sufficient volunteers
with expertise, bringing young people into the sport, increasing numbers of
volunteers, the need to replace ageing volunteer base and the need to supply major
local games.
4.5 Equity Issues
There are increasing statutory requirements that sport organisations have to take on
board and one of these is in the area of equity. The National Governing Bodies of
Sport framework states (2003:5) that board members should aim to reflect the
diversity of the population and the geographical and technical diversity of the sport.
It also states (2003:11), the equity framework requirements for NGBs. It is pleasing
to see then that the majority of responding NGBs are taking equity and diversity
issues seriously as can be seen in Chart 4.4 below although there is clearly still more

32
to do particularly with regard getting more representation from women and focusing
on cultural diversity.
Chart 4.4: Equity and diversity requirements (percentage of NGB respondents)
4.6 Measurement of Human Resources
A positive association has been established between the use of high commitment
work practices and the financial performance of organisations. As the body of
emerging evidence supports the view that managing human resources does lead to
tangible returns, the pressure to measure the accomplishments of the HR function is
becoming more intense (Pfeffer cited in Toulson and Dewe, 2004). This section of
the study asked NGBs how important the measurement of human resources was to
their organisation. Table 4.2 presents the percentage of NGBs that agreed or
strongly agreed with the statements on HR and measurement. It can be seen that
the vast majority of NGBs (83 per cent) acknowledge that the skills of their people is

33
their most important source of sustained competitive advantage. This is of course at
odds with the level of HR uptake that has been reported.
Table 4.2: Percentage of Respondents that agreed or strongly agreed with the
following statements on human resources and measurement
Human Resource Statement
Percent
Human resources should be accountable, just like any other function
74
The knowledge and skills of our people is our most important source of sustained
competitive advantage
83
Measurement of human resources gives management needed information about
the people resources in the organisation and if the resources are there to support
business strategies
67
Measurement helps with strategic planning
57
Understanding the value of our people focuses on our future human resource
needs, which is crucial for both setting long term strategies and achieving them
72
By identifying the value added contribution of human resources, the impact of
human resources on financial results can be developed
53
Through measuring the effectiveness of a particular programme and the impact it
will have on knowledge within the organisation management can make better
decisions
65
Measurement encourages the alignment of human resource plans with business
plans
49
Measurement increases the preparedness of management to take action
63
Measurement encourages human resources to adopt a strategic perspective
53
Measurement allows people to be seen as an investment to be developed rather
than as an expense to be trimmed
61
The language of business is dollars. To earn credibility and receive needed
resources, human resources need to speak in financial terms
22
Measuring human resources facilitates decision-making by making costs of
different actions visible
33
To be able to manage knowledge, we need to be able to measure it
53
Measurement of the knowledge and skills of employees is an important indicator
of future profitability
33
Measurement helps solve human resource problems
41
Measurement of human resources gives investors needed information about the
value of the business and its potential profitability
31
Human resources should be mandated and have as one of their priorities the
development of HRM accounting procedures and practices
30
Through being able to demonstrate the value and importance of the organisation‟s
human resources, human resources becomes a strategic partner
39
There is clear acknowledgement that human resources should be accountable just
like any other function (74 per cent) but disagreement that human resources in sport
needs to speak in financial terms (22 per cent). Given the responses above
respondents were asked to identify the reasons why their organisation might not

34
measure human resources and Chart 4.5 below sets out the percentage of NGBs
that agreed or strongly agreed with the statements listed.
Fifty nine per cent of organisations agreed that there were not enough financial
resources available to measure human resources with 58 per cent agreeing that
there was not enough time to develop appropriate human resource measures. Lack
of understanding of the measures by others in the organisation and uncertainty as to
what information should be reported were also highly rated as reasons for not
measuring human resources.
Chart 4.5: Percentage of respondents that indicated the following reasons why
they do not measure human resources
4.6 Resources needed by NGBs for implementation of HR systems

35
Respondents were asked what they needed to implement their desired HR system.
Table 4.3 sets out the 30 responses to this question that were identified as being
necessary for implementing an HR system. As can be seen from the table below by
the resources needed not unexpectedly focused around more part time and full time
staff and finance.
Table 4.3: Resources needed for implementation of HR systems
Resources needed
Frequency of response
Additional part time staff
12
Additional financial resources
7
Additional full time staff
7
Buy in from all staff
1
More Training
2
Increase in membership
1
This result is consistent with the research findings of the UK Sport investing in
change project in 2003 which saw the main obstacles to NGBs achieving their
objectives as lack of financial resources, the governance management structure and
lack of human resources.

36
5. Stakeholders and Corporate Responsibility
The recognition and management of stakeholder interests is considered a key
element of good governance. However, it has been argued that sport organisations
need to work harder to understand the needs of an increasing range of stakeholders
(Ferkins et al, 2005). One of the key recommendations made by UK Sport in the
Modernisation Programme was the need for NGBs to communicate effectively with
members, participants and wider stakeholder groups (UK Sport, 2003: 4). And, in the
Governance Guide for NGBs, the four principles of good governance explicitly relate
to stakeholders: accountability of decision makers to stakeholders; participation so
that all stakeholders are represented when decisions are taken; responsiveness of
the organisation to its stakeholders; and transparency about the information on
which decisions have been based, the decisions themselves, and the way those
decisions are implemented (UK Sport, 2004: 3).
This focus on stakeholder management is part of the move towards increasing
corporate responsibility, defined broadly as the societal responsibilities that an
organisation has beyond profit maximisation (Carroll, 1979). Despite the fact that
profit maximisation is not the overall objective for NGBs, corporate responsibility is
also an important issue as sport has become more prominent and sports
organisations have become increasingly influential members of the global
community; as such the concerns of transparency and accountability that are evident
within the corporate world have transcended into sport (Walker and Kent, 2009).
However it must be recognised that many sport organisations have been delivering
corporate responsibility initiatives for almost 30 years, including philanthropy,
community involvement, youth educational activities and youth health initiatives
(Babiak and Wolfe, 2009; Walker and Kent, 2009). This chapter looks at both
stakeholder management and corporate responsibility. It identifies the stakeholders
that are considered most important by NGBs, the extent to which NGBs manage
stakeholders, and the extent to which NGBs engage in corporate responsibility and
the types of initiatives they implement.
5.1. Stakeholder Identification

37
There is a need for NGBs to identify different stakeholder groups and to assess their
relative importance. One way in which an NGB can identify stakeholders from within
the organisational environment is by undertaking a mapping exercise. Mendelow
(1991) suggested that one means of doing this is to rank stakeholders on the level of
power they wield and the level of interest they have in organisational governance.
According to Mendelow‟s (1991) framework, stakeholders that have a high level of
power and interest in organisational governance are deemed to have a significant
relationship with the organisation and can be considered key stakeholders. Those
with a low level of interest but a high level of power in NGB governance should be
kept satisfied, whereas those with a low level of power but a high level of interest
ought to be kept informed. For stakeholders with a low level of power and interest,
minimal effort is needed.
The survey asked NGBs about the relative levels of power and interest among a
range of stakeholders and their responses enabled a power/interest matrix to be
drawn up, which locates stakeholders along these dimensions. Chart 5.1 presents
these results. It is important to point out that this chart represents the aggregate
results from all the NGBs that responded to the survey. Therefore, it does not
account for the relationships between an individual NGB and different stakeholder
organisations. The real benefit for an NGB would be to undertake their own version
of this mapping exercise. This would enable each NGB to analyse its various
stakeholders in relation to one another and, as discussed below, help to develop a
strategy towards managing different stakeholder organisations. Nevertheless, chart
5.1 is noteworthy. It shows that some stakeholders, such as commercial sponsors,
are considered to have comparatively high levels of power, but low levels of interest
in an NGB‟s governance. On the other hand, political actors, such as the Department
for Culture, Media and Sport, and sport agencies, such as Sport England and UK
Sport, have high levels of interest in corporate governance, but wield comparatively
less power. This is reflective of developments in the organisational and policy
landscape in which NGBs operate. Houlihan and Green (2009) argue that the
Government‟s modernisation agenda has resulted in the lines of accountability of
Sport England and UK Sport being drawn upwards to Government and outwards to
commercial sponsors, rather than downwards to key partners, such as national

38
governing bodies. Perhaps a similar process is evident for national governing bodies.
Chart 5.1 suggests that NGBs might be attending more to sport agencies and
sponsors than to their own member clubs and individual members.
Chart 5.1: Stakeholder power and interest (aggregate mean score for each
stakeholder on a scale of 1 –no power/interest to 5 – high power/interest)
5.2. Stakeholder Management
Understanding and managing multiple stakeholder relationships is at the heart of
good governance. It should also be a critical consideration for NGBs when planning
and implementing their strategies. The previous section examined how NGBs can
identify and map stakeholders according to power and interest. The next step is to
consider how NGBs do (and should) manage those stakeholders. First, the survey

39
asked NGBs to indicate to what extent they acknowledged and monitored the
concerns of all legitimate stakeholders and took their interest into account in decision
making. Almost two thirds (63 per cent) responded that they did this to a large or
very large extent compared to just five per cent of NGBs that stated that they do not
consider stakeholders at all. Broadly, therefore, it appears that stakeholder
management is a significant issue among a majority of NGBs.
More specifically, Low and Cowton (2004) have identified two main techniques that
enable organisations, such as NGBs, to manage stakeholder relationships. First,
stakeholder engagement, which requires an organisation to meet and consult with
stakeholder groups, but where those stakeholders have little influence on decision-
making. Second, stakeholder participation, which involves a more inclusive
management strategy, allowing stakeholder groups to be actively involved in
decision-making and integrating them within the governance structures of an
organisation. Of course, it is not always straightforward to distinguish between the
two. They might better be thought of as points on a continuum from low engagement
through to active participation.
The survey sought to explore both stakeholder engagement and stakeholder
participation among NGBs. First, it looked at specific stakeholder engagement
initiatives. Chart 5.2 presents the results. A very high proportion of NGBs provide
information to stakeholders – through their website and/or annual report. However,
this only really constitutes the most basic level of engagement and does not entail
the active involvement of stakeholders. Still, almost two thirds of the NGBs surveyed
(62 per cent) reported that they sought feedback from stakeholders on particular
consultations and almost a third (32 per cent) held focus groups involving
stakeholders. This suggests that some NGBs are taking definite steps to engage
stakeholders actively. The essential point to consider, though, is how these
stakeholder engagement initiatives affect NGBs in their decision making. Here, it is
interesting to note that a large majority (80 per cent) of NGBs reported that these
engagement initiatives did inform their decision making processes.

40
Chart 5.2: Percentage of NGBs that engage with stakeholders in the following
ways
The key identifiable element in stakeholder participation is representation of
stakeholders within the governance structures of an organisation. The survey found
that around two thirds of NGBs involved stakeholders in this way. Chart 5.3 presents
the results. In 67 per cent of NGBs, stakeholders have representation on the main
board or committee and in 66 per cent of NGBs stakeholders have representation on
the committee structure. In addition, the survey showed that 86 per cent of NGBs
provide stakeholders with the opportunity to attend the annual general meeting
(AGM), although this should perhaps be seen more as engagement than
participation.
Of course, representation per se does not guarantee that stakeholders are actively
involved in decision making. It should be seen as a necessary, but not sufficient,
condition of stakeholder participation. Research in this area also indicates that there
are often problems concerning the level of ability of stakeholder representatives (Low
and Cowton 2004), as well as internal conflict and stakeholder disputes.
Nevertheless, these are issues that NGBs should seek to address, rather than use

41
as pretexts to neglect stakeholder representation. Indeed, stakeholder participation
and representation should remain a key objective of NGBs as they seek to improve
their governance.
Chart 5.3: Percentage of NGBs that participate with stakeholders in the
following ways
Taken all together, these results suggest that a sizeable proportion of NGBs appear
to view their stakeholder relationships as bidirectional – they seek to engage
stakeholders and take them into account, or even actively involve them, when
making decisions. On the other hand, a minority of NGBs regard their relationship
with stakeholders as unidirectional and informational, that is, they provide details of
what they are doing to their stakeholders, but do not bring them into their decision-
making processes.
Research suggests that the choice of engagement or stakeholder strategies should
be tailored to different stakeholder groups (Low and Cowton, 2004). By combining
the power/interest matrix (chart 5.1) and stakeholder engagement and participation
strategies, an NGB can identify stakeholders and implement a management strategy
appropriate for that specific stakeholder group. Figure 5.1 sets out how an NGB

42
might choose to respond to different stakeholder groups. Again, this is an exercise
that each NGB might wish to carry out for itself, as it seeks to improve its
governance through the identification and management of its various stakeholders.
Figure 5.1: A stakeholder mapping/management strategy
Level of Interest
Key Players
Stakeholder Participation
Keep Satisfied
Stakeholder Engagement
Keep Informed
Stakeholder Engagement
Minimal Effort
No need to
engage/participate
Source: Adapted from Mendelow (1991) and Low and Cowton (2004)
5.3. Corporate Responsibility
The management of different stakeholders is considered a key aspect of the broader
corporate responsibility movement. The survey also wanted to find out the extent to
which NGBs were engaging in additional activities that can be considered part of a
commitment to corporate responsibility. In total, 72 per cent of NGBs surveyed
stated that they are involved with corporate responsibility. Of these 72 per cent, 35
per cent indicated that they are committed to corporate responsibility with a further
16 per cent stating they are strongly committed. 16 per cent of NGBs also stated that
they are not committed to corporate responsibility. With corporate responsibility an
issue that sport organisations cannot ignore (Babiak and Wolfe, 2006) it was
encouraging to see that 76 per cent of NGBs agreed that they have a responsibility
High
High
Low
Level of
Power
Low

43
to implement corporate responsibility initiatives compared to only 10 per cent that felt
that it was not the responsibility of the NGB.
Corporate responsibility spans many different types of organisational activity,
including leadership, employment relations, community activities and environmental
activities. This demonstrates that there is no one overarching framework or
guidelines on how to implement corporate responsibility. Instead, implementing
corporate responsibility is dependent on the individual NGB with some activities
more appropriate than others. Chart 5.4 illustrates the different types of corporate
responsibility activity that NGBs are involved in.
Chart 5.4: Types of corporate responsibility initiative undertaken by NGBs
(percentage of NGB respondents)
It shows that 72 per cent of those NGBs that stated they are involved with corporate
responsibility look to engage with their stakeholders; 65 per cent are involved in
community-based projects; while 54 per cent of NGBs address the issue of social
inclusion. Also, 37 per cent of NGBs are involved in environmental/sustainability
initiatives. This is perhaps an area in which NGBs should look to expand their

44
activity, specifically in relation to internal organisational operations. Environmental
efficiency and sustainable development can lead to cost savings through improved
energy efficiency or waste management savings demonstrating clear business
benefits for NGBs. Chart 5.4 also demonstrates that a minority of NGBs are involved
in employee volunteering (28 per cent) and financial donations (21 per cent). These
two figures are unsurprising. With 35 per cent of NGBs surveyed having four or
fewer full-time members of staff and only 37 per cent of NGBs indicating that they
would make a surplus compared to 50 per cent that were looking to break-even there
are clearly constraints on staff and financial resources at many NGBs.
The results in chart 5.5 provide further evidence to demonstrate that there are
constraints on NGBs which impacts on their ability to commit resources to corporate
responsibility.
Chart 5.5: Percentage of NGBs that devote the following resources to
corporate responsibility
For example, only 15 per cent of NGBs have an individual dedicated to working on
corporate responsibility initiatives. Moreover only 24 per cent have a budget for

45
corporate responsibility; 32 per cent receive funding to implement corporate
responsibility activities; and 33 per cent have a specific corporate responsibility
strategy. However, it is encouraging to see that despite the economic recession only
20 per cent of NGBs stated that funding is less available and just 12 per cent stated
that they had reduced their commitment to corporate responsibility.
The monitoring and evaluation of corporate responsibility initiatives is a key issue
that many organisations need to address. Given that corporate responsibility relates
to many different organisational activities, measurement is a complex activity. The
survey found that 58 per cent of NGBs that undertake corporate responsibility
initiatives monitor the progress of these initiatives and 51 per cent evaluate the
impact. What this survey is unable to show, and where further research is needed, is
how these NGBs monitor corporate responsibility and the criteria on which the
impact is evaluated.
The survey also asked NGBs what they hoped to achieve by implementing corporate
responsibility initiatives. Chart 5.6 lists a range of objectives and highlights the
percentage of NGBs that stated these were important or very important when
undertaking corporate responsibility. Chart 5.6 shows that increasing participation is
clearly the most important objective of corporate responsibility with 70 per cent of
NGBs stating that it was very important and 13 per cent stating it was important. It
also shows that 45 per cent of NGBs consider that recruiting young athletes is a very
important objective of corporate responsibility with 33 per cent stating that it is
important. Moreover 37 per cent of NGBs revealed that enhancing the public image
of the NGB was both an important and very important objective. These results
illustrate that NGBs place a high level of importance on the benefits that they can
gain from corporate responsibility initiatives rather than the benefits that stakeholders
gain. For instance only 10 per cent, eight per cent and seven per cent of NGBs
respectively answered that reducing anti-social behaviour, reducing youth crime, and
raising educational standards were very important objectives of corporate
responsibility initiatives. Given the increasing pressure on NGBs to meet policy
objectives set out by DCMS and Sport England, such as increasing participation, and
with funding increasingly tied to policy objectives, it is understandable why this is the
case.

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Chart 5.6: Percentage of NGBs responding important of very important to the
following corporate responsibility objectives

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6. Conclusion
Governance has become an increasingly important issue that NGBs in the UK have
had to address due to examples of poor management, financial failure, and
increased public funding for sport that have resulted in the need for more
professional sports administrative structures. These issues have been addressed
during the last decade by UK Sport and the Sports Councils as part of a
Modernisation Programme aimed at improving NGB governance. This report has
presented the findings from survey research that has analysed standards of
governance at UK NGBs and considers the extent to which some of the
recommendations from the Modernisation Programme have been implemented.
The first section focused on the role of the board and committee, which has the
responsibility for overseeing the governance of an NGB. The results revealed that
there are certain aspects where the majority of NGBs demonstrated adherence to
best practice. For example, almost all NGBs surveyed had a strategy that covered at
least the next three years, with the majority of these NGBs stating that the strategy
was well-defined – a key aspect going forward. However the report has identified
that there are still particular aspects of governance in which many NGBs in the UK
do not adequately address including board induction, board training, and the
evaluation of board performance. These are important issues that NGBs need to
consider in the context of modernisation.
The second section presented data outlining human resource management systems
and practices in NGBs. Strategic human resource management sophistication has
been captured using the concept of formalisation, underpinned by associated
functions and practices. As Nichols, Gratton, Shibli and Taylor (cited in Taylor and
McGraw 2006) have indicated previously, professionalization, increases in the
number of paid staff, changes in government policy and funding criteria, and an
increasingly strict compliance climate have necessitated more formalised HRM. The
impact of these factors is clearly variable however with just 33 per cent of NGBs
reporting formal HR systems in place in this study. Overall given the detailed
modernisation programme of 2003 for governing bodies it is a more than a little

48
surprising that in the seven years since, NGBs still don‟t seem to be operating to the
standard that has been identified for their categorisation in the Competency
Framework as inferred from the fact that nearly half of the current respondents fall
into categories 1 and 2 and yet only one third claim to have a formal HR strategy.
Training has been identified as a key action to be undertaken yet training
opportunities for both paid and volunteer staff were identified by only one third of
responding NGBs with little money spent on training. There is still much to be done
to convince NGBs, as the literature and evidence asserts, that the use of HRM policy
and practice improves business outcomes and provides competitive advantage.
The final section of the report looked at stakeholders and corporate responsibility.
Issues of transparency, accountability, participation, and communication are
important issues for NGBs. The survey showed that a very high proportion of NGBs
engage with stakeholders through their websites and annual reports, while the
majority also seek stakeholder feedback. It was also encouraging to see that the
majority of NGBs have stakeholder representation at board/committee level. The
majority of NGBs are also involved with corporate responsibility initiatives although it
was clear that the benefits that an NGB can gain from such initiatives are on the
whole, more important that the societal impacts.
Despite the Modernisation Programme and the support provided by UK Sport and
the Sports Councils, there are still areas where NGBs could improve governance
practices. Based on the analysis of the survey data a number of recommendations
are presented in the following section that align with best practice guidance and
provide a checklist for NGBs to consider where relevant. However the extent to
which these recommendations are appropriate is dependent upon the individual
NGB. UK NGBs are a diverse and heterogeneous group of organisations and not all
recommendations will be appropriate at all NGBs. There will also be many examples
of NGBs that already follow best practice guidelines in line with the
recommendations. The survey has also revealed that many NGBs suffer from
resource constraints. Therefore implementing change can be difficult. The guidance
and support that UK Sport, the sports councils and the Central Council of Physical
Recreation can provide is therefore critical and the first point of call for an NGB
wanting to improve governance.

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7. Recommendations
The Board and Committee
The number of board or committee members should be no more than 10
NGBs must consider appointing at least one independent non-executive director
from outside the sport to their board or committee
The board or committee should be involved in decisions on hiring senior staff
NGBs should implement an induction procedure for new board/committee
members that sets out the role of the board and includes terms of reference,
code of conduct, statutory duties, and director responsibilities
NGBs should provide appropriate and relevant training for board/committee
members
NGB boards should nominate one individual responsible for evaluating annual
board performance
The chair of the board/committee should undertake annual appraisals of
individual board members
NGBs need to consider the development of a marketing strategy
The board/committee needs to delegate operational issues to NGB staff
The board/committee should develop a risk management policy
All NGBs should have Sport Resolutions written into their statutes/constitution
Human Resource Management
NGBs should be encouraged to deploy HRM in a more sophisticated way through
the Competency Framework
There is a need to identify barriers preventing NGBs from implementing what
appear to be more effective practices
NGBs should build a sound participatory base that rewards, recognises and
empowers both volunteer and paid employees
NGBs should provide support and training programmes to assist with the
development of more strategic and formal HR practices

50
NGBs need to provide developmental training for all levels including board
members, paid staff and volunteers
NGBs need to consider developing a method for measuring the importance of
investing in human resources in sport organisations
Stakeholder Management and Corporate Responsibility
NGBs should undertake a mapping exercise and identify their stakeholders
according to the level of power they wield and the level of interest they have in
NGB governance
NGBs should seek to implement stakeholder engagement and stakeholder
participation strategies appropriate to the position of stakeholders on a
power/interest matrix
All NGBs should bring key stakeholders to the board/committee to improve
stakeholder representation
Where NGBs are involved in corporate responsibility, the objectives must be
clear from the outset in order to evaluate impact

51
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