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Can he pick the right board players for the modern game?

As the All Blacks’ first tough match against England last weekend showed, rugby is not for the faint-hearted. The same can be true off the field.

At the end of May, a special general meeting of NZ Rugby, the game’s national organisation, decided on the future governing structure. This marked the culmination of an arm wrestling match between the national body and the key state unions, with the latter emerging victorious.

Media reports reflected the depth of emotion surrounding the outcome: NZ Rugby president Dame Patsy Ready was reportedly preparing to resign, while the Players’ Association threatened a separate organisation for the professional game.

Deeper forces were at work behind fundamental issues such as financing and board appointment patterns.

Since the game went professional in 1995, there has been a long-standing tension between two institutional “logics”: one that is corporate, concerned with commercialism, professionalism and efficiency, and the other that is community-oriented, concerned with “grassroots” voice and member representation.

Making that dual mandate work is now up to NZ Rugby and the state unions to move forward at tomorrow’s annual general meeting, with some commentators suggesting the game’s future stability is at stake.

Finding common ground

The challenges facing the game are widely acknowledged: stagnant or declining participation rates, the financial sustainability of the professional game in a small local market, deteriorating spectator attendance, the low presence of Māori and Pasifika in leadership positions and questions about maximising opportunities in the women’s game.

What is-is At issue is how the game will be funded and how NZ Rugby will be structured to meet these challenges.

The tension, which came to the fore in May, was sparked by NZ Rugby’s investment deal with US private equity firm Silver Lake in 2022.

Part of the agreement involved NZ Rugby commissioning and publishing an independent governance review. This resulted in the Pilkington Report (named after the review panel’s chairman, David Pilkington). The report, published last year, found that the NZ Rugby model was no longer “fit for purpose”:

The structure it was in was not designed for a business of this size and complexity.

The report included two main recommendations: selecting independent board members through an independent process and establishing a “stakeholder council” to ensure broad representation.

Two proposals were put forward at the special general meeting. The first proposal, supported by the NZ Rugby Board, Māori Rugby Board and Players Association, was rejected in favour of the second proposal, supported by key state associations.

Referee awards try in school rugby match
Feeding the base of the game: Hastings Boys High School plays Napier Boys High School in 2024.
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Competing bids

At the heart of the debate is a complex disagreement over the “independence” of board members. NZ Rugby wanted to move from a model of “office independence” that risked being unduly influenced by state union interests, to a more corporate model of “independence of thought”.

Under the previous NZ Rugby model, board members could not also sit on the board of a state union or similar rugby organisation (“tenure independence”).

In practice, the board selection process saw candidates campaign for nomination by state unions. The fear was that they might then feel obliged to support the interests of those unions and potentially influence the decisions of an elected board member.

However, the new Joint Stock Companies Act requires board members to act “in good faith” and in the “best interests” of the organization as a whole (“independence of thought”).

Both proposals presented at the special general meeting allow for an “open” application process, meaning candidates no longer need to be nominated by a state union. Both proposals include a stakeholder council and an appointment panel in the board selection process.

However, the state union proposal would require three of the nine board members to have previously served on a state union board, potentially narrowing the candidate pool and potentially allowing pro-state union members to return to the board.

Given that there will be six more board members, this may not be a problem. Perhaps more telling, the state union proposal gives the stakeholder council more power than the Pilkington report suggested.

More importantly, this would give the stakeholder council the authority to “approve” certain board selection criteria and processes.

However, the stakeholder council (now called a governance advisory panel) is broadly church. It provides representation from the Māori Rugby Board, the Pasifika Advisory Group, the NZ Super Rugby clubs and the Players’ Association. Combined with an independent chair and three state union representatives, it can represent a range of community and professional perspectives.

All Blacks coach Scott Robertson with NZ Rugby CEO Mark Robinson at the press conference
Tough at the top: New All Blacks coach Scott Robertson on NZ Rugby CEO Mark Robinson in 2023.
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All on the same team

Our research shows that appointments panels have been used by New Zealand sporting organisations for over 25 years. The NZ Rugby model of a mix of independent and stakeholder perspectives on appointments panels is not new.

The research also suggests that the two competing logics in NZ Rugby – professional/elite and amateur/grassroots – can be disentangled. Both co-exist in various forms in other New Zealand sporting codes.

As NZ Rugby prepares for tomorrow’s AGM and the phased implementation of the state union proposal, all stakeholders will need to act in the best interests of the game and the NZ Rugby organisation.

The game’s top management ultimately needs well-chosen representatives who can bring their individual experiences and perspectives to the table, but who have the ability to think and act independently without any particular vested interest.

Rugby has been described as “a game for anyone and everyone”. The same goes for the NZ Rugby board, stakeholder council and appointments panel. They are all on the same team and contribute their own skill sets.

All they have to do now is get the ball across the line in the general assembly and then turn it between the goalposts of good management.