IFC calls for improved governance of football clubs

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The Independent Football Commision – the body set up in 2002 to monitor the performance of football’s governing bodies – issued its 2nd Annual Report in February 2003. Some aspects make particularly interesting reading for supporters of York City.

One particular area that the IFC addresses is Governance within football. The report notes a variety of evidence in relation to the operation of clubs that “indicates a disturbing lack of understanding of corporate responsibility and a core failure to monitor and assure the quality of corporate management.” The IFC comments “whatever the actual state of governance in football, the perception is that it is not good” and, across the game as a whole, “the governing bodies are not currently succeeding in changing public perceptions that the football business is ill-governed, nor are they answering the critics loudly or firmly.”

“The IFC suggests that the FA should establish a Code of Corporate Governance for clubs, and models of best practice, against which Club Directors should be required to report. Again, the IFC recognises that this will not cure all the ills, but it believes that, in conjunction with a fit and proper person test, it will strongly signal the FA’s determination to take firm action and deter those who seek out football club boardrooms for leisure, glamour or easy financial pickings. Deterrence is a laudable objective.”

The IFC’s call for improved corporate governance within the game coincides with the Corporate Governance review being undertaken at York City by the Trust and the Club. As first announced some weeks ago, the review is being led by a project team from the Trust Board and addresses the framework of structures and processes to help ensure that the Club is managed in the best interests of the owners (i.e. the supporters and the community of York), by applying good governance principles. The review covers a wide range of matters including the make-up of the boards of both the Trust and the Club, the roles and responsibilities of each of the Trust and the Club, and the decision making framework that operates. Relevant details will be announced by the Trust in due course.

Within the football industry, many people are looking at what has been achieved at York City and how things work out going forward. York City could be a model of community ownership, and good governance, for other clubs to follow. For instance, Sir Brian Mawhinney, Chairman of The Football League, has previously commented “The supporters of York City deserve a particular clap on the back. I do not think that club would still be viable if it were not for the supporters. It is a good example of what a dedicated bunch of supporters can mean to a club. Other clubs should take note. Clubs are going to watch the progress of the likes of York City very closely over the next few years.”

The IFC’s Annual Report also refers to the protection of clubs and their assets. The IFC report states “Here again, the football authorities have ground to make up. The FA will find it hard to escape from its reputation – justified or not – of failing to apply such regulations that are or have been in place. Rule 34 is one example; the business of football has moved on too far for it to be revived. But the FA’s duty to protect clubs’ communal and sporting nature is a constant, and should be a driving force for modernising the rule, not abandoning it.” [As stated by the IFC, Rule 34 limited the payment of dividends to the directors of football clubs, but many clubs are now structured around multiple companies.]