A window of opportunity

A window of opportunity has opened for improving supporter engagement at our beloved CAP, but we fear that it’s an opportunity that won’t be taken. In this blog we will explain why and put forward some solutions. We apologise in advance for it being a bit long, but we encourage you to read the piece through to the end- so please stick with it!

Though deadly dull for some, the need to reform the governance at CAP has been a frequent subject for debate at CF10 Towers for a long time. For example, in our blog ‘In search of love and governance at Cardiff Arms Park’ published in June 2017, we outlined a number of key principles that an effective board had to adhere to. In fact, there is absolutely no shortage of guidance as to how successful sporting bodies should operate. Sport Wales produced an excellent document in 2015 entitled the ‘Governance and Leadership Framework for Wales’ which provides an effective roadmap for sporting organisations seeking to improve their governance. Its fourth principle is to foster objectivity through having a ‘balanced, inclusive and skilled board’ and its minimum expectations include:

• Ensuring board composition adequately reflects the community served by the organisation and diversity of society
• Having at least 25% independent non-executive board members bringing knowledge from outside the sport or activity
• Ensuring that board members are chosen on the basis of their competence, ability, leadership, integrity and experience.​

Sport England issued an equivalent document in 2016 and, not surprisingly, there is a massive overlap in content between the two reports- there are only so many versions of how to get this right.

In May of this year, in anticipation of  the requirements of the new Professional Rugby Agreement, we wrote:

"What a positive statement it would be though for the club to make changes to its governance without a financial gun being held to its head? It has a real opportunity to show that it can become a progressive entity rather than simply being a dinosaur waiting for the meteor to hit. Establishing a skills-based board rather than a rich man’s club would be a major step in capitalising on our new-found success and give a strong message about our intended direction of travel."

Well, the good news is that the initial steps to establish such a board do seem to have been taken. As we know, Peter Thomas is standing aside as chair, and we believe that an independent search company has been tasked with finding a new chair and two additional non-executive directors (NEDs) -which is all great news and massive credit is due to those concerned. The chair will be a tough act for reasons that we specify below, and so getting this right is pivotal to achieving substantial culture change at the club. Though unconfirmed, we believe that the intention is that the NED posts be filled by candidates a. with a recent rugby background (who on earth could that be???) and b. with a more commercial/PR history. What is unknown at present is what will happen to the other current board members. As a reminder, these are currently:

Paul Bailey (500,000 shares);

Martyn Ryan (750,000)

Simon Webber (20,000);

Christopher Sutton, Christopher Nott and Simon Down (representing Cardiff Athletic Club’s 1,250,001 heritage and ordinary shares);
Sir Gareth Edwards (5,000) (as the Chair’s nominee)

Richard Holland (Chief Executive).

Sport Wales recommends that an effective board should comprise 8-12 people, so if Cardiff Blues Ltd. opted for the upper limit, that would theoretically allow for all the current incumbents to remain alongside an independent chair and the two new NEDs; it would also allow the 25% NED box to be ticked and presumably enable the partial correction of the present board’s failure to reflect ‘the community served by the organisation and diversity of society’.

The bigger question is whether it would achieve the cultural change that Cardiff rugby needs  to fully capitalise on the more positive environment in which we now appear to be operating and in which the WRU and the four professional entities are described as genuine partners?

We think not.

If the board essentially remains intact with a few additional bits grafted on, it will be business as usual. This is perhaps particularly likely to be the case when a long-standing and highly influential chair stays on as a board member (which is not a criticism of Peter Thomas, but an acknowledgement of the challenging scenario that often arises whenever such sideways moves take place). It is however a substantial opportunity for more significant reform, and that is the next nettle that the company must grasp. An obvious solution would be to have the same criteria being used by the independent search company to identify prospective new members to all current directors and to invite competition for more (and perhaps all) board places; while this might ruffle the feathers of the existing incumbents, anyone with the appropriate credentials should feel confident of securing a place on a skills-based board if they are the right person to be there in the first instance.

In the pre-amble to the Sport Wales document, the need to engage stakeholders is seen as a critical point: ‘Well-run and governed organisations with clear strategic aims and an inclusive approach are far more likely to thrive in this competitive world’. Supporters’ Trusts vary tremendously in their aims and functions, but a common denominator is that virtually all trusts share the ambition of seeking to ensure that the supporter view is central to the governance of their club. CF10 is no different and, from day one, we have had the aim of seeing a supporter director sit on the board of Cardiff Blues Ltd. We unashamedly have a vested interest in how this scenario plays out therefore.

One of the reasons that we do so is that the company is of course part supporter owned further to the general share issue for what was then known as ‘Cardiff Rugby Football Club plc’ in 1996- a fact that is rarely acknowledged outside of the shareholder AGM.

Early in 2017, CF10 acquired a small number of shares in what is now Cardiff Blues Ltd.; every member of CF10 is also therefore a shareholder in the company as well as in the trust itself. More significantly, through a mechanism agreed with the company, members can proxy their shares in Cardiff Blues Ltd. to the trust so that we can vote en bloc if and when required. To date, 46 members have done so and we have a collective holding of just under 40,000 shares. As you gather from the above figures, while this is not sufficient to trouble the big boys as yet, there are almost another 500,000 shares out there in the hands of supporters and recruiting these to the cause would make a seismic difference. Even without these, we are still the 10^th largest shareholding in the company and already outstrip the holdings of several current board members.

So far so good. Discussions over the last few months indicated that there would in fact be a supporter representative on the re-constituted board, but more recent soundings have suggested the opposite and that this may not be achievable ‘this time around’. ‘Why not?’ is the obvious response. This is a golden opportunity for the company to go further than just appointing three NEDs in its quest to modernise how it operates; showing that it takes the views of those who pay their hard-earned cash to go through the gate and/or who have part-funded the company seriously by having them represented at board level would be a massive statement of intent. Aiming to include a supporter director would be no different to saying that the two NEDs need come from specific backgrounds-it’s simply a matter of including it in the search criteria for board members.

Supporter directors are not a new concept of course. They are a well-established idea in football, and the famous example of the Swansea Supporters’ Trust is often quoted as an exemplary case study. Closer to home, it was confirmed at its recent AGM that our friends in the Scarlets Supporters’ Trust, Crys 16, have become a full board member at the Scarlets having spent a period having observer status. So, not only do the Scarlets lead the way in demonstrating how to manage their heritage properly in the professional era, they are leading the way in including supporters at the core of their governance process. So, why can’t Cardiff Blues do the same? Why does West have to be best?

One possible reason, or maybe more accurately, feeble justification, is that the future position of the three Athletic Club representatives on the board is yet to be determined. Perhaps fearing a life off the board, one of these representatives (who we would argue most fans would fail to pick out in an identity parade), claimed last year that his role was to act as a supporter representative. Our enquiry as to when he last met with said supporters unfortunately received no response, and the claim that this is the role of the three nominees is patently nonsense as they are there to represent the complex interests of Cardiff Athletic Club. The case for a genuine supporter director therefore remains intact.

So, what are the benefits of having a supporter director? Our parent organisation, Supporters Direct, has recently outlined what these can look like:

• They have to be a constructive player in the life of the club, and not be seen as someone who is seen as being simply there to object
• They must always have their feet on the ground and be aware of supporters’ views by having open lines of communication and being aware of what prevailing views are being expressed by supporter organisations and through social media
• They must be prepared to act as a critical friend to the club and exert counter-control over its actions when required
• They have to be able to represent strongly-held supporter views to the board in a coherent and articulate fashion
• They must be able to balance potentially competing supporter views
• They need to be sufficiently strong to be able to present and pursue what might be seen as minority views by other board members
• They have to be able to communicate the board’s view to supporters as well as vice versa
• They would have to respect the fact that some matters may need to remain confidential-something which could be difficult at times
• They need to be aware of the risk of ‘going native’ (that is, unintentionally becoming part of the establishment that it’s their role to challenge).

Above all, a supporter director has to be a constructive player in the life of the club, and not be seen as someone who is seen as being simply there to object- they have to ‘add value’. The role works best when it is part of a board that has a clear code of conduct, there is a clear role description, the appointment is time limited and there is an up-front agreement to respect the fact that some matters may need to remain confidential (a key point being that a supporter director is legally a director of the club and therefore bound by the same fiduciary duties as any other director, even though they are elected by supporters). It is also crucial that there is a clear democratic process in place for their appointment and that potential candidates are subject to the same procedures (application, interview etc.) that would apply to other board members.

Though it’s soft data, there is an overwhelming view that engaging with your supporter base in such a formal way improves the quality of decision making at a club. It also helps avoid making bad decisions which those detached from the terraces may sometimes not see the consequences of (and we’ve experienced one or two of those down the years!)

So, Cardiff Blues Ltd., it’s not just a case of supporters having to make the case to be included on your new-look board; you have to make a case as to why they shouldn’t given that they part own the company. The ball is in your court and, as business guru Tom Peters has said, ‘If a window of opportunity appears, don’t pull down the shade’.

Over to you guys.