Governance reminder- ASC 'Sports Governance Principles' require sports to have implemented an effective compliance program
Sports Law eBulletin - 18 February 2016
National and state sporting organisations know they are required to strive to meet the Australian Sports Commission's 'Sports Governance Principles.' However, there are some principles that sports commonly overlook. Sports which do not comply with the ASC's principles could find their funding is adversely affected.
In this eBulletin, we outline one of the less-known governance principles and what your sport needs to do to ensure that it complies with the requirements of this principle.
- Your sport's compliance system - what standard must it meet?
- What does compliance with the Standard require?
- Further information
The Australian Sports Commission (ASC) publishes the 'Sports Governance Principles'. The Principles outline standards in sports governance that sports are required to strive to meet. A failure to meet the Principles often leads to adverse funding consequences for sports that do not comply.
Principle 3.5 requires sporing organisations' boards to have implemented an "effective compliance system" which is recommended to comply with Australian Standard AS3806:2006 (the Standard) regarding compliance systems. At a minimum, the Principles state that your sport's compliance system must:
- comply with all relevant statutes, regulations and other requirements;
- ensure effective internal controls and full and accurate reporting to the board on all compliance issues; and
- ensure that your sport is financially secure and able to meet its financial obligations when they fall due.
The Standard requires a compliance program be created to ensure the organisation adheres to its obligations. Compliance obligations vary across sports and include legal and regulatory requirements, industry codes, voluntary codes, agreements and policies. The Standard consists of four key principles:
- Commitment: requires a commitment and culture within the organisation (from board level down) to effective compliance;
- Implementation: sports must clearly assign responsibility for compliance outcomes. Competence and training needs must be identified and controls put in place to achieve compliance obligations;
- Monitoring and Measuring: requires a sport to monitor, measure and report on its compliance program and be able to demonstrate compliance through both documentation and practice; and
- Continual Improvement: this principle requires a sport to regularly review and improve its compliance program.
The Standard itself provides much more detail on what is required to be implemented in order to comply with its key principles.
In December 2014, the International Organisation for Standardisation introduced a compliance standard (ISO 19600:2014) which is heavily based on the Standard. In June 2015, Standards Australia published AS ISO 19600:2015 which is identical with that international standard. It also revised and further developed the Standard. The Sports Governance Principles still refer to the Standard, notwithstanding this update.
The Standard details a range of organisational changes that are required in order to ensure compliance, including implementing a compliance policy and program to ensure that applicable laws are adhered to. Sports should therefore consider how they currently ensure adherence with all applicable laws and whether that compliance is appropriately monitored. Reporting on, and review of, compliance procedures is also a key focus of the Standard.
Other sections of the Standard relate to less-tangible parts of the governance of a sport. These include things like the attitude of management and the board to compliance, encouragement of good behaviours and a culture of compliance. Sporting organisations should give thought to how these are currently operating within their organisations - could they be improved?
If your sport is not currently compliant with the Standard, it is likely that changes or updates will be required to ensure that you are compliant with the Sports Governance Principles. If you would like to discuss your organisation's compliance with the Standard or the Principles, please contact a member of our team.
All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.