Pursuing Effective Governance in Canada’s National Sport Community
Sport Canada – November 2011
What is Governance?
Governance in its broadest interpretation refers to how an organization is run, including the various
processes, systems, and controls that are employed. But in a more practical sense, it is really about a
governance team, or Board, being able to strategically direct and lead an organization. This includes being
able to make key decisions regarding priorities and roles, to define expectations and delegate authority,
and to adhere to legal requirements. It is not about managing programs or people, nor about operational
details. Ultimately the application of good governance serves to realize organizational goals.
Good governance is also about achieving desired results in a manner consistent with organizational values
and accepted social norms. This is particularly true in the world of sport where our product is people – in
particular, our athletes. Sport governance must meld the passion and dedication of volunteers into a
focused governance team, operating with integrity and striving to enhance the experiences of the
participants, and the performance and reputation of the sport.
Why does Governance matter for Sport Organizations?
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Strategic thinking and direction-setting are fundamental to success
The sport environment is complex and the demands on leaders are significant
Management can thrive when supported by strong governance
Organizations need to be accountable to their members and stakeholders
Organizations want to be recognized as credible by the public
Funding partners expect results and accountability
Participants in sport have high expectations of their organization and its leaders.
The Potential of a Commitment to Governance Principles
Sport Canada believes that improving governance practices will unleash potential in the sport system.
Real-life Canadian examples demonstrate that creative, knowledgeable and determined leaders can make
a significant difference for their sport and the overall system. Five principles of effective governance have
been identified. Although not an exhaustive list, the principles identified describe characteristics of effective
governance that virtually any member, director, funding partner, stakeholder, athlete, coach or official would
agree are important.
High Standards of Ethical Behaviour
Central to the five governance principles is the expectation that Directors will model the highest standards
of ethical behaviour, acting honestly and in good faith, and in the best interests of their organization. As
guardians of their organization, Directors are looked to for leadership and vision. They set the strategic
direction, and protect the reputation and integrity of the organization.
There are several areas that are integral to implementing a high standard of ethical behaviour and underpin
the five governance principles.
Legal responsibilities
Directors ensure that the organization complies with the Canada Not-for-Profit Corporation Act (NPCA) and
acts in accordance with its By-laws. The Board ensures that the Constitution, Bylaws, and policies are up to
date and meet legal requirements.
Moral responsibilities
Directors have a responsibility to want to serve the organization and see it develop and grow. They must be
able to endorse the mission and values, and care passionately about the work of the organization. Directors
need to commit the time, energy and expertise to ensure a positive future for the organization.
Standards, regulatory and policy functions
Directors require current policies, systems and structures to guide the direction and operations in an effective
and efficient manner. The Board should be conscious of the standards to which it operates, and its role in
exercising appropriate and effective control over the organization. Being aware of the regulatory and legal
requirements and ensuring a clear set of policies is in place are essential for accountability.
Performance Measurement
Determining how the organization will measure its success is a key component of effective governance. The
organization should decide on performance indicators to measure progress in achieving the mission, values
and strategic plan. Measurement strategies to assess the Board and staff performances are also essential to
effective governance. Sport organizations succeed when they accomplish what they set out to do within the
constraints of budget, volunteer and staff time.
Culture of respect, tolerance, inclusiveness, and integrity
A culture of respect, tolerance, inclusiveness, and integrity is a function of the organization’s leaders. Directors
should establish and model a code of conduct with high ethical standards that describes how people treat
each other, how decisions are made, who is included, and how people communicate. Ethical behaviour puts
the needs of the organization ahead of individual interests.
The very nature of sport is that it is for everyone. Diversity, inclusiveness, and the ability to appeal to and
represent all of society need to be understood and demonstrated by Directors. By embracing differences and
similarities, the Board can ensure its composition and membership reflect the wider society.
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Governance Principles for Sport Organizations
Commitment to
Vision, Mission,
Values and Guided by
a Strategic Plan
Transparent and
Accountable for
Outcomes and
Results
Clarity of Roles and
Responsibilities
High Standards
of Ethical
Behaviour
Focused on Human
Resources
Effective Financial
Control
Five Principles underpinned by a commitment to high standards of ethical behaviour
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Commitment to Vision, Mission, Values and Guided by a Strategic Plan
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Clarity of Roles and Responsibilities
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Effective Financial Control
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Focused on Human Resources
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Transparent and Accountable for Outcomes and Results
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Commitment to Vision, Mission, Values and Guided by a Strategic Plan
WHY?
A clear vision, mission, values and strategic plan are primary tools used to provide effective leadership and
governance. Without clear direction of where the organization is heading and its current priorities, the
Board and management will flounder in making decisions about what to do and what opportunities to seize.
WHAT?
The Board must ensure that the organization has clearly identified goals, strategies for achieving them, and
indicators to know when they have been successful. This plan must be shared throughout the organization,
with relevancy to and commitment by the stakeholders.
HOW?
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A strategic plan is created, communicated and used to guide the organization
The values that guide the organization are identified, communicated, understood and internalized
Statements of vision and mission are developed and regularly reviewed to ensure relevancy
The Board ensures that human and financial resources are aligned with strategic priorities
Scanning and assessing the environment are done regularly to ensure the organization and its
plan remain relevant and current
Performance indicators are established so the organization will know when it is successful.
HELPFUL IDEAS
Ensure Mission is unique
A mission statement describes the organization’s purpose, what it is trying to achieve and why it exists. A
mission includes what the organizations does, for whom, and how. Be sure your mission provides a clear
frame of reference for the organization. It should not be so broad that it could describe another
organization.
A clear and understood Mission statement will help organizations avoid ‘mission creep’, the tendency to
keep growing services and expanding scope without realistic planning and decision making. Ensure the
organization acts within its mission and places restrictions on its activities. A good guideline is “do
everything within the mission statement and nothing outside it”.
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Commitment to Vision, Mission, Values and Guided by a Strategic Plan
Ground the strategic plan in reality – don’t make it a ‘wish list’
In strategic planning, creative thinking is encouraged. But too often, participants get carried away and plan
well beyond the realities of the organization. When developing the plan make sure current resources
(human and financial) and operations are part of the analysis. Ensure the planning process is grounded
within a clear statement of reality.
Link the plan directly to budget and priority setting
Once priorities have been established through a planning process, an Operational Plan is used to align
priorities with human and financial resources. If initiatives planned exceed the amount of resources
available, further priority setting must be done. By linking priorities from strategic plans to budget, staff
allocation and volunteer capacity, an organization can infuse reality into the plan.
Address the ‘full plate syndrome’
When allocating human and financial resources to a strategic plan, in many cases, resources are already
dedicated to current initiatives. If the plate is already full, and work is to be added – something must be
removed. Continuing to add new initiatives to an already full plate sets the plan up for failure. Strategic
planning provides an opportunity to analyze and make decisions -- adding and deleting programs and
services are some of those decisions.
Keep the strategic plan ‘off the shelf’
Too often, development of the plan becomes the end result, not the means to better governance. Think of
the plan as a roadmap that is used regularly to assist in making decisions on which direction to take. To
keep the plan active, try using the major headings in the plan as a framework for Board agendas, making
sure that decisions and reports are focused on the key goals and planned priorities.
Help the Board think strategically
It is easy for Directors to get mired in detail and urgent issues, rather than thinking strategically. Here are
strategies to assist. Begin every Board meeting with a review of vision, mission and values. Discuss
strategic opportunities regularly and prepare ‘what if’ scenarios. Have an agenda item on scanning the
environment. When dealing with issues, start at the ‘principle’ level before getting into the details.
Is process or product more important?
The process of developing a strategic plan is as important as the final plan, i.e., the product. The process
must include strategic thinking, i.e., what is happening within our organization, and what is happening in the
world outside. Looking too narrowly will not provide the vision needed for a relevant, multi-year strategic
plan. Equally important is the need to engage stakeholders in order to build ownership and commitment to
implementing the strategic plan. Finally, be careful not to get trapped in the process. The process is the
means, not the end; the end is clear direction for the organization.
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Clarity of Roles and Responsibilities
WHY?
Lack of role clarity between volunteer and staff leaders is a recipe for conflict, confusion and a waste of
valuable resources. A mixing of roles will ultimately detract from the Board’s important leadership function,
while confusing those charged with management and administrative responsibilities.
WHAT?
The Board’s job is to govern the organization, not manage it.1 While the Board needs to ensure that
effective management is exercised, it must take great care to not become immersed in both management
and day-to-day operations. The Board should set high level strategy and vision and then ensure they are
followed.
HOW?
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The Board ensures that the organization has capable management and develops and nurtures a
productive working relationship with the CEO/Senior staff.
A clear division of roles and responsibilities between the Board and the CEO/Senior staff is set
out in writing
Directors stay focused on strategic governance, not on management and operational delivery
Directors avoid all real, potential and perceived conflicts of interests
The Board ensures that all Committees and sub-groups are relevant to the organization’s
strategic priorities and functioning with clear terms of reference and accountabilities.
HELPFUL IDEAS
Build a partnership with the CEO/Senior staff
A thoughtfully designed partnership between the Board and the CEO/Senior staff will nurture strong
leadership throughout the organization. As with all partnerships, the parties must know and respect the
strengths and weaknesses of each partner. All parties must clearly understand their roles, responsibilities
and reporting relationships. A poor relationship can lead to ineffectual performance by all human resources
in the organization.
Clarify who does what
This is not a simple or a finite task. Most Directors have held other volunteer positions before moving into a
Director position of a national organization. As volunteers, they may be used to playing roles that are no
longer appropriate in a governance Board. Part of orientation is ensuring clarity on the roles and
responsibilities of Directors of a national not-for-profit corporation.
There may be situations when a national Board needs to do more than govern. In these cases, it is important that the Board
can differentiate between its governing and management/administration roles and ensure that sufficient time is devoted to
governing.
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Clarity of Roles and Responsibilities
Establish a norm of clarifying roles
As soon as there is a conflict over who should or should not have done something, address it. If it is not
addressed, the conflict can grow and relationships may deteriorate. Symptoms of lack of role clarity include
overlap or duplication and gaps. Discussion with those involved should include: What happened/didn’t
happen? Why? What should happen in the future? A simple discussion, with no blame involved, can
prevent similar situations and set norms for clarifying situations on a regular basis.
Clarify the role of special interests of Board members
Boards are comprised of individuals with different backgrounds and passions, e.g., coaches or officials,
provincial ties, high performance. Unclear loyalties can be at the core of many issues and conflicts, with
quality decision making being compromised by personal interests. An elected Director must always act in
the best interests of the organization. Although this is not always a straightforward area, Directors must
avoid special interests and parochial attitudes.
Clarify when Directors are task volunteers
In many organizations, volunteers may hold several positions and play different roles. This is an issue if
Directors hold roles dealing with operational issues. It is essential to separate the governance
responsibilities of Directors from other task functions for which they may be responsible. A clear distinction
between the strategic function and the operational delivery needs to be maintained. The Board should not
deal with operational issues.
Establish a Performance Appraisal system for the CEO/Senior staff
The Board's primary role is to monitor and evaluate management, operations and organizational results,
based on the strategic plan. Because the CEO/Senior staff is accountable for achieving the results
determined by the Board, it is important to design and implement an appraisal system that measures
performance against agreed-upon goals, as well as providing the CEO/Senior staff regular and helpful
feedback.
Build a trusting and supportive climate
Taking the time to build a mutually supportive, cooperative and trusting climate is well worth the investment.
A good example of a trusting climate is when Directors feel comfortable approving policies based on the
considered opinion and advice of management. Without a climate of trust and support, all decisions and
actions are suspect. More time is spent on process and how things are done and by whom, than on getting
things done. If the climate is toxic, it must be treated.
Delegate decision making
Delegating authority to the appropriate group or individual is an important tool for more effective use of
human resources. When a person or committee have responsibilities for making decisions that affect them,
motivation and commitment are much better. The Board should ensure that checks and balances are in
place to manage decision making.
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Effective Financial Control
WHY?
Managing the financial assets of the organization is an essential governance function because effective
financial management plays an important role in enabling the organization to accomplish it mission, values
and strategic plan.
WHAT?
The Board must ensure that the financial management is undertaken according to generally accepted
accounting principles (GAAP), that financial reporting provides sufficient information, and that the finances
are aligned with the strategic plan. The Board must also be committed to providing financial oversight and
be prepared to challenge areas of concern.
HOW?
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The Board ensures that a comprehensive financial management system is in place with
appropriate financial controls and approved financial policies
The Board regularly reviews the organization’s financial position and takes action as necessary
Each Director is knowledgeable about the financial affairs of the organization
Appropriate disclosure is made of financial information to members, stakeholders, and the public
Financial management is guided by specific rules, ensuring complete and accurate records for
review by a public accountant.
HELPFUL IDEAS
Oversee the financial situation
Many Directors do not have the expertise to provide meaningful oversight to the financial area so the responsibility is
delegated to a few individuals. This is a dangerous practice. Each Director has a legal and moral responsibility to
oversee the finances. Orientation of Directors should include training in financial literacy. Also financial reporting
should be done in a clear and simple manner.
Establish a Finance and Audit Committee
Establishing a special committee, operating on behalf of the Board, with financial expertise provides an additional
level of scrutiny, and additional support for both the Board and the CEO/Senior staff.
Plan for financial sustainability
Most sport organizations are heavily dependent on government funds to operate. If government priorities or
requirements change, the organization can be in jeopardy. The Board should establish contingency plans that look at
broadening the financial base of the organization through securing other sources of revenue, and reducing
dependence on public funds.
Financial accountability and reporting
Receipt of public funds demands higher scrutiny and increased public disclosure of financial information. Directors
can use this reporting as a tool to build trust and confidence in the overall organization, rather than setting up a
climate of divisiveness and ‘we versus they’.
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Focused on Human Resources
WHY?
People are the most valuable resource of any sport organization, with its success largely dependent on the
quality and commitment of its human resources.
WHAT?
Sport organizations need to maximize the contributions of their people, at all levels. Growing the
commitment and capacity of the people within the organization can make a significant difference in being
able to accomplish plans and priorities. Directors’ actions can demonstrate a belief that building human
capital matters.
HOW?
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New Directors receive an orientation to their roles and to the practices of the organization
Directors receive on-going training and support to accomplish their duties
The Board evaluates its performance annually and plans for its improvement
The Board is committed to succession planning guided by a Nominations Committee that
understands the governance needs of the organization
The Board has a diverse composition that is reflective of the organization’s membership
Human resources are valued, managed and supported as diligently as financial resources
Organizations seek to identify and attract skilled individuals to contribute to the organization.
HELPFUL IDEAS
Orient new Directors
New Directors need an orientation to the organization, its strategic plan, structure and governance,
including who makes what decisions. Too often, Directors that do not receive an orientation fall into one of
three categories: they burn out because they try to do everything; they are apathetic because they do not
know what to do; or they try to change the organization taking it places it was never intended to go.
Ensure succession planning
Often overlooked is the Board’s responsibility for planning the leadership succession. Directors focus on
the present rather than the future. Effective governance includes identifying the future leadership and
developing mentoring and professional development opportunities for upcoming leaders. A succession plan
can help ensure an organization’s long-term health, including a more focused approach to meeting the
agreed upon directions and priorities of the organization.
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Focused on Human Resources
Nominating Committee
A Nominating Committee has ultimate responsibility for recruiting volunteers to match the governance
needs and skill sets required by the Board. However, identification and recruitment of quality volunteers is a
responsibility of all Directors. Also, By-laws should include renewal strategies, such as limits to the time a
Director holds office, in order to ensure that new energy and ideas are added. At the same time a Board
needs continuity strategies, to ensure organizational memory and stability.
Assess Board Performance
Too often, Directors get so caught up in the complexity of governance that they forget to review their own
performance. An annual review of Board performance can help identify key areas to improve Board
functioning, such as where improvement is required, where the Board does not have the skills or expertise
needed to accomplish its mission, or where Directors’ expectations are not being met by the Board or
organization.
Transparent and Accountable for Outcomes and Results
WHY?
Sport people care passionately and have high expectations of the organizations to which they contribute
their time and energy. Members, partners and the broader sport community want to be informed and are
more likely to contribute to an organization they understand, respect and support.
WHAT?
It has become increasingly apparent that sport organizations must demonstrate and communicate to their
stakeholders what they are doing, why they have chosen certain approaches, and what results are being
achieved. Accountability for actions, decisions and funds is essential.
HOW?
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The Board, committees and management operate in a manner that is transparent and open, and
accountable to its members and participants
The Board identifies anticipated outcomes and evaluates progress
The Board seeks ways to communicate and engage directly with its members and stakeholders
The Board commits to building effective and mutually beneficial partnerships
The Board seeks to strengthen the reputation of the organization and build credibility within the
national sport community.
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Transparent and Accountable for Outcomes and Results
HELPFUL IDEAS
Understand public trust
The law requires that independently incorporated not-for-profit organizations be governed by a Board with
individual members referred to as Directors. A Director is a fiduciary - one that accepts and holds a “public
trust”. Directors are able to receive and use public funds to serve a public good, as defined in their
constitution, by-laws. Public trust is the obligation placed on Directors to ensure that the organization’s
activities remain in the public domain to benefit this and future generations. It refers to the obligation placed
on Directors to provide governance for the benefit of the organization’s publics.
Ensure accountability to funders
It is important to appreciate that external funders need to see that an organization is carrying out its mission
and serving the public good, i.e., public trust. Where organizations do not receive public funds they should
still be exercising effective controls in fulfilling their mission, in order to benefit this and future generations.
Measure and report on performance
The Board needs to determine what the organization intends to accomplish over a period of time. Describing
what difference the organization wants to make and establishing indicators to measure this difference,
provide Directors with the essential tools for measuring and reporting on performance. The Board should
prepare a comprehensive annual report on how it fulfilled its governance roles, and how the organization
progressed toward its vision and strategic plan, including achievements and aspirations. Open, honest and
transparent communication of results and challenges can help build a climate of respect and trust.
Maintain confidentiality
Directors are required to maintain a level of confidentiality on many issues. This should be an agreed upon
norm, and reinforced during particularly sensitive discussions. Also, Directors should remember that
regardless of the discussion and individuals’ positions, when a decision is reached, everyone supports the
decision and speaks with one voice outside of the Board meeting.
Establish a Conflict of Interest Policy
A conflict of interest policy should be in place and declarations of interest updated at least once a year and
declared in relation to agenda items at each Board meeting. This is a simple tool but essential in this era of
perceived conflicts of interest.
Conclusion
Organizations will be encouraged to refine and strengthen their governance practices. Sport Canada recognizes the
need for flexibility given sport organizations have differing memberships, mandates and internal challenges – all of
which suggests that a variety of structures and approaches are valid. Governance is also never ‘fixed’ but rather a
continual and evolving work in progress. Sport has an additional challenge as Directors can and do change with
some regularity. Each sport organization is asked to pledge an active commitment to the pursuit of effective
governance through the implementation of these five principles.
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