Football clubs suffering from too few directors, report warns
All professional football clubs in England should be mandated to have at least three directors to prevent governance failings that threaten their existence, a new report warns today.
The report, by LCP’s Sports Analytics and Advisory practice and governance specialists LawDeb, highlights worryingly small boards at many clubs in the top five divisions.
Fourteen clubs have just two board members, while four – including crisis-hit Sheffield Wednesday – have only one director.
It follows the rubber-stamping by Parliament of the Independent Football Regulator (IFR), after the Football Governance Bill received Royal Assent earlier this month.
It also comes as both four-time English champions Sheffield Wednesday and Morecambe FC face grave financial issues which have brought them sanctions from league chiefs.
“The introduction of the Independent Football Regulator marks a watershed moment for the game. It offers a real opportunity to drive meaningful change in protecting clubs, fans, communities and the wider football industry,” said LCP Head of Football Governance Aaryaman Banerji.
“At the heart of this change must be good governance at a club level. As the report shows, this needs to start by resetting boardroom standards, ensuring these can operate effectively and that directors are appropriate and well-informed.”
Football’s knowledge and diversity gaps
The report notes that problems at clubs often arise from insufficient oversight from other board members and directors’ lack of understanding of the workings of English football.
The latter issue can arise from a shortage of local knowledge. Almost a third (32 per cent) of directors are non-British, while there are no British directors at nine of the 116 clubs.
To address these, the report recommends the IFR requires at least one board member per club to pass a formal qualification in the subject.
“It’s clear from our research that the governance landscape is a tale of two cities: while some clubs are managed effectively, a significant number continue to operate with limited board sizes and insufficient diversity,” said LawDeb’s Patrick Davis.
“We believe that implementing stronger codes of conduct and enhancing corporate governance practices are essential steps in raising standards across the sport and ensuring clubs are better equipped for sustainable success.”
The report also recommends the IFR sets diversity targets for all boards of professional clubs. Currently, 77 clubs have no female board members and 91 per cent of directors are aged 40 or over.
“While many clubs are well run, our analysis shows there are also far too many where the board is too small and/or lacks diversity,” said Bart Huby, Head of Sport Analytics and Advisory at LCP.
“We believe our recommendations would go a long way to improving the quality of boardroom decision-making and reducing the risk of clubs failing.”