Self-preservation at odds with values

Governance gripes: NZR board’s instinct doesn’t match its core role

There is an irony that no one could have missed in this omnishambolic business of trying to agree governance change in the national game. It’s that rugby is a sport which demands selflessness and sacrifice from its players, but seemingly promotes selfishness and selfpreservation among its administrators.

There is also something faintly comical — although it’s not provoking many laughs — that the people running rugby are making front and back-page news almost every day now as they bungle their way through what should have been a straight-forward, well-signposted journey towards best practice governance, while they continue to promote the idea that New Zealand is the world’s beacon of rugby excellence.

So, too, is there a conviction among those in power that on the strength of reputation, astute management and world-class strategic planning, they are going to globalise the All Blacks into the world’s biggest sporting cash machine.

It is not delusional for this ambition to exist.

But the All Blacks are going to be successfully commercialised and the game flooded with cash only if those with the ability to do so vote for revolutionary governance change and if the existing New Zealand Rugby board does the right thing by standing down.

Without change, New Zealand — literally and metaphorically — will sit at the bottom of the rugby world.

This is not hyperbole but rather a cold, dispassionate assessment based on the evidence staring everyone in the face.

The game in New Zealand is not being governed, managed or led by the right people, and it is beyond belief that the board released a statement yesterday which said: “Calls for the current NZR board to stand down are a distraction, and do not accurately reflect the findings of the Governance Review, which was focused on governance reform at a high level, rather than any concerns around the perceived performance of the current board.

“The significant relevant expertise and experience around the current NZR board table is reflected by the strong commitment to drive this much-needed governance reform for the good of the game into the future.”

This is the ultimate Mary Antoinette moment, a “let them eat cake” response that fails to read the prevailing mood for revolution.

If board members are certain that within their midst are skills, experiences and institutional knowledge that are vital to the future well-being of the game, why not test the theory by standing down and trusting the new system will identify their value if they reapply for a seat?

It defies logic to say that while the system is not fit for purpose, those who have come through it are.

It is a yet more flawed argument to say that what the game desperately needs to preserve is the expertise and experience around the table currently, when the independent review — on which this process of change has been initiated — so clearly states throughout its 134-pages that the system is failing to attract and appoint directors with the requisite expertise and experience the game needs.

As an example of where the governance system has failed, cynics can point to the absence within the nine-strong board of any director with high-performance experience.

The entire financial strategy is built on the All Blacks being successful, and yet there is no one on the board with even the vaguest understanding of the highperformance world.

The impact of this lack of expertise has been telling, with former All Blacks coach Sir Steve Hansen saying in 2022: “The high performance department has to be squirming at the moment because of our record at under-20 level.

“They started off the under-20s in 2008, we won the first four and we won in 2015 and 2017, and since then, we’ve finished seventh and fourth.

“England and France have dominated the tournament. Are we getting that part of our business right? I don’t think so.”

There was also significant reputation damage inflicted between August 2022 and March 2023 when between NZR’s executive and board, they made the All Blacks a laughing stock as they flipped and flopped about what to do with the head coaching role.

It also has to be asked on what grounds the board could say it is effectively managing financial risk and commercial strategy.

In 2021, NZR aggressively pushed a private equity deal with United States fund manager Silver Lake — selling the vision that the investment house would bring digital smarts to transform the revenue profile of the business and secure the long-term financial future of the grassroots.

But late last year, NZR was presenting financial forecasts in which the Silver Lake cash would be gone by the end of the decade, while the provincial unions were told last week their annual distribution would be cut $1.8 million this year and next.

Someone needs to be asking how Silver Lake have invested $262m into the game and yet provincial funding is being cut.

That “someone” should be the board, who are there to manage risk and oversee strategy.

But as the independent review into the governance structure concluded, there are endemic issues relating to relevant and measurable information flow between the executive and NZR board, making it difficult for the directors to accurately assess the leadership team’s performance.

Equally, more questions should be asked about the decision made by the provincial unions late last year to take another $62m of equity from Silver Lake.

By taking that money, which comes with a 4 per cent interest repayment, the unions burdened NZR with a further $2.5m of costs in 2024, knowing the national body’s revenue is not growing as forecast and expenses are higher than anticipated.

The unions chose to sell long-term revenue — effectively hundreds of millions of dollars — to park $62m in a relatively low-interest account.

It made no financial sense, as it has reduced the amount of money available to community rugby for generations to come. The increased interest payment to NZR is also partly why the national body has had to cut provincial funding this year.

The provincial unions are adamant any governance change has to make provision for three of NZR’s directors to have at least two years’ experience in the community game.

But surely the madness of the self-destructive decision to take more Silver Lake capital last year is all the evidence required to say the complexities of the new landscape are such that the grassroots needs more nuanced and sophisticated champions to protect them.

Bad decision after bad decision is starting to compound.

For the board to say calls for them to stand down — these have been made by the Rugby Players’ Association and now the provincial unions — are a distraction is precisely the sort of self-preservation antics that highlights why the system is not fit for purpose.