Sir Bill Gammell and Norman Murray recommend radical change in SRU governance

THE wide-ranging review into Scottish Rugby which has been carried out over the last six months by Sir Bill Gammell and Norman Murray is published today [8am on Friday] and has recommended the removal of meaningful elected representation from the governance structure of the organisation.

If the review’s recommendations are voted through with a two-thirds majority at an SGM (planned for February/March) then the current SRU Council – introduced by the Dunlop Report in 2005 to oversee “the performance of the Scottish Rugby Board on behalf of the various stakeholders in the game” – will be disbanded and not be replaced, as will be the SRU Trust which has held the Union’s assets for the member clubs since 1911.

The rights and powers of the Council and Trustees will transfer to a new holding company limited by guarantee (‘New SRU’), with its all-powerful Board of Directors taking responsibility for the strategy, values, allocation of capital and resources, internal controls and risk management, leadership, delegation and oversight.

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The guarantors of this new company will be the individual member clubs of the Union, who will retain ownership and carry any risk for the company going belly-up by virtue of their guarantees – but who will have no real control or oversight of how it is run.

Gammell and Murray’s review states that the ‘New SRU’ Board will consist of ‘an independent chair’, ‘three independent non-executive directors from a commercial, industry or other professional background’, ‘three further independent non-executive directors with a background in rugby’ and ‘up to three executive directors’.

The initial Board will consist of the current chair (Colin Grassie), plus three executive and non-executive directors each from the current SRU Board, while the existing SRU Nominations Committee consisting of Board members Adam Gray, Julia Bracewell, Dee Bradbury and Grassie will be responsible for filling in the gaps.

These are the same people who voted in July of this year to reward Grassie (though he apparently wasn’t in the room when the vote was taken) and Lesley Thomson – the two Board members who played the leading roles in keeping the review into the Keith Russell affair entirely in-house – with third terms as non-executive directors on the current SRU Board, in clear contravention of the two-terms only recommendation stipulated in the current constitution drawn up by Sherriff Bill Dunlop’s Governance Working Party in 2005.

Going forward, the chairman and the independent non-executive directors on the ‘New SRU’ Board must – as they do now – submit themselves for election or re-election by member clubs once every three years at the ‘New SRU’ AGM. This is a red herring in terms of giving member clubs any real say in the make-up of the Board because they won’t have any input into who stands for election, so they can only endorse (or not) the Nomination Committee’s nominees.

The existing ‘SRU Limited’ will become a direct subsidiary of ‘New SRU’ and carry on its role as the principal operating and trading entity within the group – the base of all real power and decision-making. Gammell and Murray anticipate that, at least initially, the Board of ‘SRU Limited’ will comprise the same individuals as appointed to the ‘New SRU’ Board, including the six ‘independent’ non-executive directors.

Splitting the professional and the community game

Below this will sit two sub-Boards. The first is the Rugby Development Board [RDB] which will be responsible for the domestic and community game, and the second will be the Professional Performance Board [PPB] which will oversee international, pro team, Super6 and academy tiers.

Both bodies will constitute committees reporting to the SRU executive team, which will in turn report to the ‘SRU Limited’ and the ‘New SRU’ Boards.

The PPB will be chaired by the SRU Chief Executive (Mark Dodson), and also have the Chief Operating Officer (Dominic McKay), the Performance Director (Jim Mallinder, when he is eventually released from his current contract with the RFU), the men’s national team coach (Gregor Townsend), the women’s national team coach (Philip Doyle), the Super6 Director (Sean Lineen), the SRU Technical Director (Stevie Gemmell) and up to two further independent appointees. There is no direct representation from either of the pro teams.

The RDB will consist of an ‘independent’ chair, the Director of Rugby Development (Sheila Begbie), up to two SRU appointees, six ‘independent’ appointees from the domestic game and up to two further ‘independent’ appointees.

If this sounds promising, the means by which the ‘independent’ RDB members will be recruited is likely to set alarm bells ringing. While clubs have the opportunity to ‘nominate’ candidates, the actual appointments will be made by an RDB Nominations Committee comprising of the Chair of the RDB (appointed by the main Nominations Committee), the SRU Director of Domestic Rugby (appointed by the SRU Executive) and two of the ‘New SRU’ independent directors (also appointed by the main Nominations Committee). It will, therefore, be hand-picked by the main Board/Executive.

The RDB will assume responsibility for the oversight of all levels of the domestic game of rugby in Scotland and will “derive its authority from an annual budget agreed with the Board of ‘New SRU’”, but there is no indication of how that figure will be calculated or whether there will be any guarantees – tied to turnover, for example – going forward.

Blurred lines of accountability

Gammell and Murray say that the clubs will continue to have their voice heard through four distinct channels –

• The appointment of three independent ‘rugby’ non-executive directors to the New SRU board

But, as already discussed, these individuals are actually appointed by the Board and therefore beholden to the Board rather than the membership.

• The legal rights of the clubs as members of ‘New SRU’ under the articles of association and general company law.

But that assumes that the articles – which will not be available until after the SGM – are written with the aim of strengthening the voice of the clubs rather than the Board, which would be at odds with the general tenor of this whole review. The devil is very likely to be in the detail, which makes it concerning that clubs will be asked to vote before having sight of what they are actually voting for. Like Brexit on a smaller scale.

• The creation of a new Rugby Development Board which will include six independent appointees from the domestic game in Scotland nominated by member clubs.

Again, while clubs might be allowed to ‘nominate’ these ‘independents’, they will be appointed by the RDB Nominations Committee, which will be moulded by the ‘New SRU’ Board’s Nomination Committee, so therefore accountable to the Board rather than membership.

• The election of a President invited to attend ‘New SRU’ Board meetings and Rugby Development Board meetings.

The new role of the President will be strictly ambassadorial. This individual will be invited to attend meetings of the ‘New SRU’ Board and of the Rugby Development Board but “without the normal responsibilities of a company director” – that is no say and no vote.

This means that the only real direct recourse the clubs will have to influence the Board will be the nuclear option of a vote of no confidence at an AGM. This would be a major step which most reasonable clubs would be very reluctant to take because of the power vacuum it would create, and the uncertainty that would inevitably cause. Effectively, the clubs would have to choose to burn down the house in order to get rid of the squatters.

“As with any company limited by guarantee, you have the right as an individual to put a motion forward that you are not going to support this director, or whatever it may be, and if there is enough of you then he or she leaves the Board … how sad if that is what Scottish Rugby is in the future,” said Gammell, seemingly oblivious to how close we have come to that happening not too long ago.

Leap of faith

These recommendations are asking the clubs to put an awful lot of faith in the people who have wielded power inside Murrayfield these last two tumultuous years.

“I can’t comment on the past, all I can do is try and create the future,” said Gammell. “The guys on the Council and the Board have bought into the idea that you need the appropriate skillsets in the appropriate places to hold accountability. And the accountability should come from properly qualified people in the right places to hold the right people to account.”

In fact, while the Council may have agreed in principle to instructing the review, it seems they have not endorsed the findings – rather they have supported the distribution of the findings (without recommendation) to the clubs so that they can make up their own minds.

If the proposals are voted through by a two-thirds majority at the Special General Meeting planned for February or March then a second SGM in May will seek to ratify the detailed documentation of the new constitution and approve the transfer of the shareholding to ‘New SRU’, with Gammell and Murray’s brave new world up and running by the end of that month.

• Read the full review HERE

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