Roles and Responsibilities

A board? A committee? Call it what you like – but in any State Sporting Organisation they play a significant role in driving success. What is important to note is success can mean many things, and a board has to define this and navigate accordingly.

Whilst this guide covers the financial management of a State Sporting Organisation, the role of the board does not stop with this. Participation, community engagement, competition results, Olympians – all sports will have different goals. What are yours?

Finance is a small element of the overall strategic directive of the board, but is important to note that all board members are responsible.

From a financial viewpoint, the treasurer will often be charged with matters pertaining to finance. It is incredibly important to understand that a board is a team sport. Whilst the treasurer may be the star with numbers, the board runs the game plan. In running this game plan, there is a joint sense of commitment and responsibility.

Directors owe certain duties to its State Sporting Organisation and members.  These duties require directors to act competently, honestly, in good faith and in what they consider to be the best interests of the State Sporting Organisation. Under the Corporations Act or Associations Incorporations Act (NSW), if a director fails to satisfy any of these duties, they could ultimately be liable to compensate members of the organisation or third parties who suffer loss as a result of that failure.

As guidance, the following are some of the broad principles which are relevant in determining if a director has fulfilled their duty of care, skill and diligence to the State Sporting Organisation.  Although the list is not exhaustive, it serves as good guidance¹:

• Take reasonable steps to place themselves in a position to guard and monitor the management of the State Sporting Organisation;
• Acquire a working knowledge of the fundamentals of the business of the State Sporting Organisation;
• Remain informed about the activities of the State Sporting Organisation and assess the safety and properness of the business practices of management;
• Generally monitor the State Sporting Organisations affairs and policies, although a detailed inspection of day to day activities need not be undertaken;
• Maintain a familiarity with the financial status of the State Sporting Organisation by regularly reviewing the financial statements; and
• Make enquiries of matters identified within the financial statements that require action or more information.

Whilst the roles of directors are often well known, it is important to note the role officers have within your State Sporting Organisation. Dependent upon the circumstance, an officer can have the same obligations as a director. These circumstances are shaped by legislation (such as the Corporations Act or the Incorporated Associations Act (NSW)), and in summary, an officer is:

• A director or secretary; or
• A person who makes or participates in making decisions, has the capacity to affect the financial standing of your State Sporting Organisation or provides instructions to which the directors act upon.

Officers in your State Sporting Organisation could include for example a Chief Executive Officer, a Secretary or Chief Financial Officer. 

As a closing thought, ASIC provide this guidance which is also worth considering:

Source: https://asic.gov.au/for-business/running-a-company/company-officeholder-duties/your-company-and-the-law/

Each State Sporting Organisation will be compiled differently, however a highly functional board helps navigate an often delicate financial path. Some boards will have executive members such as a Chief Executive Officer or Chief Financial Officer, whilst others will rely solely on volunteers. Regardless of size and composition, the role a board plays in the finances should be consistent. In compiling your board, it is important to consider if you have the financial literacy to not put at risk your sport, or you as board members or officers individually.

The Sports Governance Capability Framework available through the Office of Sport website should be the starting point to consider board compositions and skill matrix assessments.

State Sporting Organisations, more than most, understand the importance of keeping score. Enter the treasurer, an often thankless role that is paramount to every State Sporting Organisation. Put simply, the treasurer is the board delegate responsible for maintaining financial records for the board’s consideration. Depending on the size of your State Sporting Organisation, the treasurer may have help in the form of a CEO, finance manager or bookkeeper, or they may also maintain the books and records.

Given the often limited resources available, the treasurer roles can be a balancing act. Whilst profit and loss and balance sheet can be a retrospective focus, the treasurer needs to be able to plan for the future, ensuring the strategic objectives of the State Sporting Organisation are supported by the appropriately available resources.

A successful treasurer will, amongst other things:

• Develop close working relationships with bookkeepers, finance managers and those responsible for maintaining records;
• Provide considered content for consideration by the board;
• Have a sound understanding of the reporting obligations of the State Sporting Organisation;
• Develop strong relationships with external funding bodies;
• Be inquisitive and ask questions;
• Challenge the financials and ask the right questions – bringing the board with them in these discussions;
• Act as a conduit between the board and their auditors;
• Work with various other functions to ensure alignment of intentions – i.e. fundraising, participation etc.

The board are ultimately responsible for the financial performance of a State Sporting Organisation. In establishing sound financial governance, the use of a financial advisory or audit and risk committees are worth exploring. These can come in all shapes and sizes, and are commonly referred to as examples:

• Audit and risk committee;
• Finance and audit committee; and
• Financial advisory committee.

Regardless of size and structure, this committee or sub-committee are able to support the board, and the treasurer, in the financial outputs of the State Sporting Organisation. It is important to charter these appropriately to provide appropriate guidance. 
 
As an example, Swimming NSW, as published in their annual report, use a finance and risk committee as follows:

The creation of such committees puts an area of focus on this core function, with the ability to align the overall objectives to the financial objectives. These committees can be compiled of board members, but increasingly they are leveraging external advisors or volunteers to provide technical expertise. 

In considering an advisory committee, it is worth asking the following:

• Does the board have appropriate resources to address all finance and risk obligations, or would they benefit from recommendations being made?
• Does external resources exist that could be utilised within a finance and risk committee environment?
• Do board meetings get consumed with financial reporting?
• Is there an appropriate sounding board to frame and challenge financial policy, management and risk?

As a board, you have a fiduciary responsibility to your sport. It is essential that you take the time to understand your decisions, and seek clarity and guidance if you are unsure. 

¹Financial Management. It’s your business. Produced 2003 NSW Department of Tourism, Sport and Recreation