Struggling Football Clubs Warned Regarding Insufficient Leadership in Their Boardrooms, Study Suggests
The Football Governance Bill received Royal Assent earlier this month, paving the way for significant changes in the management of English football clubs. One of the key outcomes of this legislation is the establishment of the Independent Football Regulator (IFR), which has been rubber-stamped by Parliament.
According to a report by the LCP's Sports Analytics and Advisory practice, titled Football Governance in Transition, there are several areas in need of improvement in the boardrooms of professional football clubs. The report highlights concerns about small boards at many clubs in the top five divisions, with 14 clubs having just two board members. Furthermore, approximately one-third of directors are non-British, and there are no British directors at nine of the 116 clubs.
To address these issues, the report recommends three key measures:
- Minimum Board Size: There should be a legal requirement for all boards of regulated clubs to have at least three directors to reduce risks associated with overly small boards.
- Knowledge and Training: Directors must have knowledge and understanding of the structure and culture of English football. Related training should be provided by the newly established IFR.
- Improving Diversity: The IFR should set targets aimed at improving diversity within football club boardrooms, addressing current poor gender representation and limited younger member involvement.
These recommendations stem from the report’s analysis of 116 clubs in the English men’s football pyramid, which found many boards to be inadequately sized or lacking in diversity and sport-specific governance knowledge—factors linked to governance failures at clubs like Reading FC, Scunthorpe United, and Southend United.
The report also emphasizes the need for a more diverse and well-informed boardroom to ensure effective management and sustainable success in English football clubs. Banerji, the LCP Head of Football Governance, stated that the introduction of the IFR offers an opportunity to drive meaningful change in protecting clubs, fans, communities, and the wider football industry.
Moreover, Bart Huby, Head of Sport Analytics and Advisory at LCP, believes that the report's recommendations would improve the quality of boardroom decision-making and reduce the risk of clubs failing. Patrick Davis of LawDeb stated that implementing stronger codes of conduct and enhancing corporate governance practices are essential steps in raising standards across the sport.
The report notes that problems at clubs often arise from insufficient oversight from other board members and directors' lack of understanding of the workings of English football. To combat this, the report suggests that the IFR should enforce stronger codes of conduct and enhance corporate governance practices across the sport.
The report also highlights the cases of Sheffield Wednesday (a crisis-hit club) and Morecambe FC, which are facing grave financial issues. The new report suggests that all professional football clubs in England should have at least three directors to prevent governance failings. Furthermore, the report recommends that the IFR requires at least one board member per club to pass a formal qualification in English football.
In conclusion, the LCP's report provides a comprehensive guide for improving boardroom governance and diversity in English football clubs. By implementing these recommendations, the football industry aims to enhance boardroom decision-making quality and reduce club failures across the football pyramid.
[1] Lincoln City FC: A case study of good governance practice [2] Football Governance Act reforms [5] Creation of the Independent Football Regulator (IFR)
The Football Governance Bill's introduction of the Independent Football Regulator (IFR) opens up an opportunity to address the inadequate sizes, lack of diversity, and insufficient knowledge of sport-specific governance in the boardrooms of English football clubs, as highlighted in the LCP's report. Accordingly, the IFR should enforce stronger codes of conduct, enhance corporate governance practices, set diversity targets, and require at least one board member per club to pass a formal qualification in English football to prevent governance failures and improve the quality of boardroom decision-making.
