Sponsors could hold rugby to higher standards of governance

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THE question of which lucky South African company gets to channel millions of rands into rugby from next year is an open one. Deals expire at the end of this year.

Sponsors contribute almost half of the R800m that flows into the coffers of the South African Rugby Union (Saru) each year.

This potentially puts the sponsor in a powerful position. In return for paying Saru’s bills, it surely has the right — and perhaps the obligation — to ensure these funds are properly spent?

I’m not suggesting financial impropriety on Saru’s part — it produces a clean audit every year — but a sponsor would be doing South African rugby a huge favour if it were to help Saru to meet its own standards of corporate governance.

There is precedence for this in another sporting code with a comparable history to rugby.

After the Gerald Majola bonus scandal at Cricket SA (CSA), Sports Minister Fikile Mbalula in 2012 appointed Judge Chris Nicholson to investigate CSA. Nicholson produced an excellent report, not only pinpointing the weaknesses in administration but suggesting how they be remedied in line with international best practice.

Momentum Life, cricket’s chief sponsor, went on to stipulate in its contract with CSA that Nicholson’s recommendations be implemented as far as possible.

One of these was that the board, in the spirit of King 3, should ideally have a majority of independent directors equipped with the appropriate skills. Saru does not have a board. Instead, it has an executive council, which has a few independents but the majority of members are elected officials drawn from the ranks of the provincial unions.

These elected officials rely on the 14 provincial presidents for re-election after each four-year stint. This means they are less likely to take hard decisions when necessary, even when it comes to enforcing their own constitution. For instance, the Saru constitution stipulates that each union must provide an operating budget “which should reflect no worse than a break-even situation” within two months of the start of each new financial year. If member unions fail to do this, Saru can stop funding them.

In practice, some unions have failed to submit such financial statements for years. Yet Saru continues to hand over millions of rands to them each year.

Despite an often dire financial situation, unions continue to contract players in the hope of getting some silver into their cabinets. It never happens.

Saru carries the mantle for rugby, a solemn responsibility in a country such as ours. It is the “custodian of rugby in South African rugby”. A sponsor might inquire whether the benefits and powers bestowed on unions are appropriate to the wider interests of the game.

In 2013, the Mpumalanga Rugby Union was granted the right to host a Test in Nelspruit on the grounds that it would help spread the game in the area.

The year before, a study by the Sports Science Institute showed that rugby was played in a paltry 40 high schools in Mpumalanga and there was a total of 23 clubs. Apparently without any assessment being done on whether the Test had produced any long-term benefits for rugby in the region, the Pumas were granted another Springbok-Wales game last year.

 

 

And then there is the question of sustainability, a critical concern for any organisation.

In contrast to Mpumalanga, 458 high schools in the Eastern Cape play rugby and there are 263 rugby clubs. If we want to ensure a reliable pipeline of players, this is clearly an area to focus on. As a bonus, these players largely form part of the country’s dominant demographic — young black Africans.

Saru’s member union in the most fertile area of the Eastern Cape is the Border Union. Chronic mismanagement last year forced Saru to take over the running of the Border Union. The plan now is to get the union’s finances into shape, then hand it back, hopefully to a more suitable administration.

A better solution might be to stop pumping R10m a year into propping up a historically problematic administration.

Disband the union. Instead, use the money to strengthen rugby in schools and clubs. Set in place proper governance and achievable targets and you will be assured of a steady supply of skilled rugby players, most of whom will be black.

Last month, Saru launched its plan for transformation. Well meaning but essentially ineffectual, it was, yet again, all about quotas and numbers.

This plan — promising, for instance, 50% black Springboks by 2019! — is supposed to be implemented by the mostly white, middle-aged presidents who have for years been ignoring quotas.

And, crucially, there are no penalties attached to any union or team which fails to meet these targets.

Fortunately — or unfortunately — rugby has never had a Majola moment. And so it has evaded the scrutiny and external regulation imposed on cricket. Without such a crisis in rugby, the government is unlikely to intervene. But a sponsor can.

 

*This column first appeared in Business Day

 

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