THE struggle to create a governance structure for Scottish rugby which can work for everyone and help all levels of the sport to prosper in the professional era faces a critical moment tomorrow [Monday] evening at a Special General Meeting for the governing body to be held at Murrayfield.
Member clubs will be asked to vote on a proposal which has been painstakingly formulated by the SRU Council’s Standing Committee on Governance [SCOG] with the aim of establishing a long-term solution to the governance problems which have been a running sore since at least the summer of 2018, when a series of flashpoints uncovered an apparently dysfunctional relationship between the Scottish Rugby Council (elected by the clubs to oversee the sport) and the Scottish Rugby Board (hired to run the business).
The proposal is for a new company limited by guarantee [CLG] to be set up to wholly replace the unincorporated association known as the Scottish Rugby Union, taking on all the assets held by the SRU Trust [crucially the land at Murrayfield and international competition rights].
The new CLG Board will have eight ‘Custodians’ – who will as a matter of law be classified as Directors with all the consequent statutory duties and obligations – consisting of an Independent Chair, the President, Vice President and Immediate Past President of the SRU, two members elected by the clubs and two individuals selected with the assistance of recruitment consultants and appointed by Council or its successor body.
It is anticipated that the Independent Chair of the CLG, the two Custodian Directors elected by the membership and its two independent Custodian Directors will be people of standing in Scottish rugby who have “an overall diverse and appropriate skillset in line with a bespoke skills matrix”.
Custodians will not be remunerated, will have a maximum of two terms of three-years in office, and no more than six years in total inside any 12-year period.
The CLG will oversee the work of Scottish Rugby Union Limited [SRUL – ie the current Board] as it continues to run the organisation’s commercial affairs and interests, including the management of assets and the administration of professional rugby.
A Relationship Management Agreement [RMA] between CLG and SRUL will be created which will involve quarterly meetings (more frequent if required) between the two bodies. The Board of CLG will be required to give formal approval to annual budget, annual and/or longer-term strategy and the appointment or re-appointment of Chair of SRUL. Any proposed material and exceptional deviation from the annual budget or strategic plan will require approval of the Custodians. This will include, for example, disposal or other arrangements of importance for Murrayfield or major asset acquisitions.
As standing invitees, the SRUL Chief Executive Officer and its Chief Financial Officer will also be present at CLG Board meetings, but won’t have a vote.
Meanwhile, a Club Rugby Board [CRB] is to be set up to be “directly involved with CLG and the Executive team of SRUL in the formulation and implementation of the strategic vision, mission, and development of the domestic game in Scotland, including the allocation of resources to member clubs and other domestic rugby bodies”.
The CRB will be made up by individuals elected by the clubs as well as the SRUL’s Director of Rugby Development. It will have its own budget, currently proposed at 15% of SRUL’s annual turnover, with the aim of alleviating anxiety at grassroots level about clubs being marginalised and/or short-changed by Murrayfield.
As one club stalwart who supports of the motion said: “I genuinely hope we can all now move beyond such partisan nonsense under the new structure. It’ll give the clubs more direct influence over their part of the game. Which, of course, is something many having been shouting loudly about for ages. Let’s hope some grown-ups with a wider horizon than their own men’s 1st XV step up then to the challenge.”
A simple majority in a vote of member clubs is required to approve these proposals, and it is anticipated that the motion will carry fairly comfortably
This will trigger an implementation and fine-tuning period so that all final proposals, including the proposed Relationship Management Agreements and new constitutional documents, can go before a second SGM for final approval in August, when a two-thirds majority will be needed for a change in the bye-laws.
“The recommendations are aligned and founded upon the Dunlop principles,” says Professor Lorne Crerar CBE, Independent Chair of SCOG, in his introductory notes to the SGM. “The recommendations comply with all legal, financial and other regulatory compliance frameworks as well as models of best practice in governance arrangements including for Sports governing bodies and their operating companies.”