Cricket Australia board shake-up means it’s time to stop states installing their own representatives
Colin Carter
In 2011 the late David Crawford and I conducted a governance review of the Cricket Australia board.
Our recommendations were clear; The states were cricket’s shareholders but the Cricket Australia board was required to be independent.
States should not appoint their own people to the CA board. Instead, a process should be put in place where states, as shareholders, collectively appoint the board and engage it with the best possible combination of skills and experience. This way the board members will have the support of all the states because each state will essentially have veto power over any candidate who does not trust them.
“Representative” boards introduce serious conflicts of interest into the board’s operation, which harms the board’s long-term performance. Crawford and I heard this concern many times during our work, and the word “trust” came up countless times.
Essentially the situation then – and still remains the same – was that each state needed its own people on the CA board to protect its interests. There was little confidence that the then-formed CA board could be trusted to do the right thing when it came to the state.
It was ironic to note that at the time the AFL Commission did not have a commissioner from Queensland and yet the AFL spent huge amounts developing football in Queensland. He was able to do this thanks to the independence of the commission members and the fact that none of them were beholden to regional interests.
Our 2011 recommendations were quickly watered down by states, resulting in a bit of a hybrid; Each of the states nominated its own person to the CA board, and several independent members would also be appointed. But the drift of state self-interest was still embedded in the board’s design.
Today, following private property discussions, there is even talk that the agreed-upon structures will be withdrawn. The highly acclaimed Greg Chappell argued that the CA board has returned to including state appointees who can serve in state structures. This is a purely representative board district and doing so would be a terrible mistake for cricket.
All the evidence from the corporate and nonprofit world is that the “independent board” is a much more effective model. Boards with built-in conflicts of interest are often unable to make the best decisions in the best interest of the game.
Board design should also be based on a true understanding of the underlying economics. Let’s be clear; There is only one cricket business in Australia and that is national. There is no self-sustaining economic model that is solely intrastate; Intrastate cricket is the way money is spent, not made. The only cricket “job” that makes serious money in Australia is a national one; state-by-state matches or international matches. Governance design must reflect this reality, otherwise major distortions will emerge.
States are shareholders. They own the Australian game. States must then appoint an independent board that is free from conflicts of interest and tasked with developing the game in line with the national interest. States should agree on a process by which the CA board that provides the best possible skill base is selected, and each person on that board should have the support of all states. And if such a situation arose, a simple majority of states could remove a director or even the entire board. This is the ultimate guarantee of shareholders’ rights.
Representative boards may serve in private companies, but not in public companies or public institutions.
I saw both up close. A significant portion of my consulting work over the past few decades has been spent trying to get rid of representative bodies. I was a member of them too: before joining the AFL Commission (which is independent according to the 1993 Crawford report), I was a member of the board of the VFL, where each club has its own representative. It didn’t work and proved inadequate to the rigors of football. That board was abolished and replaced by an independent board (commission).
Australian cricket faces many challenges. Governance wisdom is clear; An independent board is by far the best way to go. It may not make all the decisions correctly, but this also applies to the representative board. And since the influence of self-interest is often ignored, the chances of doing things right are greatly increased.
Colin Carter is an advisor to boards and is also a former AFL club president and AFL Commissioner..
