Guidance note. Questions for sports bodies: A Code for Sports Governance Tier 1

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1 Guidance note Questions for sports bodies: April 2017

2 Introduction These questions are designed to assist in the implementation of Governance (the Code) and to prompt an assessment of governance arrangements in individual sports bodies. They are aimed primarily at organisations which fall or would fall into Tier 1 of the Code. This Tier is intended to instil good governance processes and practices in recipient bodies without creating a disproportionate administrative burden. As such, it sets out a minimum level of criteria to be met by those seeking public funding. Grant recipients are categorised as Tier 1 if: The award is granted on a one-off basis (for example, for a specific project which has a finite life); and The total amount of funding is less than or equal to 250,000. The Code anticipates that the vast majority of small grants awarded by Sport England will fall into Tier 1. Whilst we have adopted this definition and Tier 1 s mandatory Requirements when considering at whom these questions are aimed, we have kept in mind a range of sports bodies and organisations, some of which may not be making an application for funding. We recognise that for many smaller organisations, perhaps with limited governance resources or a reliance on a volunteer base, this may be the first time serious attention has been given to the issue of governance. The basic Requirements set out in Tier 1 of the Code provide an opportunity for all organisations to take a look at how they are run and the questions that follow are designed to help that process. If you have any feedback on the content of these resources, or additional questions that you d like to discuss, please contact the ICSA information centre: informationcentre@icsa.org.uk The Institute of Chartered Secretaries and Administrators, 2017 The information given in this guidance note is provided in good faith with the intention of furthering the understanding of the subject matter. While we believe the information to be accurate at the time of publication, ICSA and its staff cannot, however, accept any liability for any loss or damage occasioned by any person or organisation acting or refraining from action as a result of any views expressed therein. If the reader has any specific doubts or concerns about the subject matter they are advised to seek legal advice based on the circumstances of their own situation. 2 April 2017

3 The questions follow the Code s seven mandatory Tier 1 Requirements and reflect specific criteria set out in the document. Beyond these, however, we have aimed to provide the important questions that those who lead sports organisations need to ask in order not only to satisfy the mandatory criteria contained in the Code, but to begin an exploration and assessment of their governance. These questions are not exhaustive and should be seen as a starting point, but in asking them organisations can take steps to begin to improve the way in which they are run. [Note: The Code uses the term governing committee for those charged with governance responsibilities in Tier 1 organisations. This terminology has been adopted here. Readers should be aware that this body may be referred to by different titles, including board of directors, board of trustees, or management committee in different organisations.] Requirement 1 The organisation is properly constituted, has a clear purpose and, if membership based, is inclusive and accessible. 1. Does the organisation operate in accordance with its governing document, which sets out clearly the purpose of the organisation, its structures and decision-making processes? 2. When did we last review the governing document and consider whether it needed updating? Do we know how to change our governing document? 3. Are the roles and responsibilities of the members of the governing committee clearly defined and communicated in role descriptions for all positions? 4. Is the organisation accessible to all parts of the community it serves? If not, can the organisation justify this with regard to its stated purpose? 5. Is the governing document clear as to who can and cannot be a member of the organisation, and in which circumstances membership can be rescinded? 3 April 2017

4 Requirement 2 The governing committee meets regularly and decision making is recorded. 1. Does the governing committee meet with sufficient regularity to ensure decisions are made in a timely manner? 2. Are decisions regularly made between meetings in order to deal with organisational matters, or does the committee meet with sufficient regularity to avoid this? 3. Are formal minutes taken documenting decisions made and are they circulated promptly to ensure accuracy and that actions are implemented? 4. Does the governing committee have access to a governance professional who provides legal, regulatory and compliance guidance, records meeting decisions and oversees the governing committee s induction and ongoing development needs? Requirement 3 Conflicts of interest are recognised, managed by the chair and recorded. At least three people on the committee are unrelated or non-cohabiting. 1. Are at least three members of the governing committee unrelated 1 or non-cohabiting? 2. Do we have in place a robust and up-to-date code of conduct and protocols for avoiding and handling conflicts of interest and loyalty, including potential or perceived conflicts? When was it last reviewed? 3. How do we record conflicts? Do we maintain a register of interests of governing committee members? 4. When did we last deal with such a matter? 1 The Code employs the terms unrelated and non-related, but does not define them. Organisations may consider, where proportionate, adopting the definitions under connected person provided in section 188 of the Charities Act 2011 and section 252 of the Companies Act 2006 as appropriate. Under the Charities Act 2011, a person is connected with a trustee if they are: a) a child, parent, grandchild, grandparent, brother or sister of the trustee; b) the spouse or civil partner of the trustee or any person falling under paragraph a); c) a person carrying on business in partnership with the trustee or with any person falling within paragraph a) or b). Under the Companies Act 2006, a person is deemed to be connected with a director of a company if they are members of the director s family (spouse or civil partner; any person with whom the director lives as a partner in an enduring family relationship; a child or step-child of the director or director s partner under the age of 18 and living with the director; or the director s parents). Both pieces of legislation also include as connected institutions and bodies corporate in which the trustee or director and/or persons connected to them hold substantial interests (not specified in the Charities Act, but set in the Companies Act as 20% of the equity share capital or control of more than 20% of the voting power exercisable at a general meeting). 4 April 2017

5 Requirement 4 In deciding who sits on its governing committee the organisation considers the skills and diversity required of its committee members. 1. Is the governing committee of an appropriate size and composition to carry out its duties effectively? 2. Does the governing committee reflect the diversity of the organisation and the wider community? What have we done to promote greater diversity among governing committee members? 3. Have we undertaken a skills gap analysis and highlighted those skills, knowledge and attributes essential for delivering the organisation s strategy? How can we fill any gaps in future governing committee member recruitment processes? Requirement 5 Committee members are subject to regular election and ideally should serve no more than nine years. 1. What does our governing document state about governing committee member appointment and tenure? Do we comply with it? 2. Are members of the governing committee subject to regular election or re-election and, if not detrimental to the quality of the governing committee, fixed terms of office? 2 3. Would we need to change the governing document to introduce fixed terms and elections? 4. How fluid is the composition of the governing committee? Do we have mechanisms in place to ensure the planned refreshment of the composition of the governing committee, which balances the introduction of new talent with ongoing stability? 2 Not all organisations will elect members of their governing committee and may appoint them in other ways. The governing document should be checked as regards its provisions for elections. 5 April 2017

6 Requirement 6 The organisation has a bank account and two independent signatories are required for payments. 1. Do we have a designated organisation bank account? Is there sufficient segregation of duties in relation to handling finances and authorising payments to prevent the loss or improper use of the organisation s resources? 2. Do we have clear, written procedures covering internal financial policies and controls, which are followed and reviewed annually? 3. Has everyone on the governing committee read and understood the Charity Commission s CC8 Internal Financial Controls for Charities Checklist, even if the organisation is not a charity? 3 Requirement 7 Annual accounts are prepared, scrutinised independently of the person responsible for finance and are made available to members to describe how money has been spent. 1. How transparent are we in reporting our financial accountability? 2. Do we publish an annual statement of accounts, independently scrutinised and made accessible to members and other stakeholders? 3. Are we regularly challenged by stakeholders about our financial oversight of the organisation s resources? 4. Do we have a stakeholder engagement plan for communicating with members, players, officials, coaches, supporters and others interested in our activities in order to ensure that their voices are heard and for incorporating the results into our decision making? When was it last reviewed and updated? April 2017

7 ICSA: The Governance Institute is the professional body for governance. We have members in all sectors and are required by our Royal Charter to lead effective governance and efficient administration of commerce, industry and public affairs. With over 125 years experience, we work with regulators and policy makers to champion high standards of governance and provide qualifications, training and guidance. We seek to develop the skills, effectiveness and profile of people working in governance roles at all levels and in all sectors through: A portfolio of respected qualifications Authoritative publications and technical guidance Breakfast briefings, training courses and national conferences CPD and networking events Research and advice Board evaluation services Guidance notes are prepared by the ICSA policy team to support the work of company secretaries and other governance professionals working in the corporate and not-for-profit sectors, and in NHS trusts. Guidance notes offer authoritative advice, interpretation and sample materials for the many issues involved in the management and support of boards. As such, they are invaluable for those helping their organisations to build trust through good governance. There are over 100 guidance notes available to ICSA members at ICSA: The Governance Institute Saffron House, 6 10 Kirby Street London EC1N 8TS April 2017