The big news story in sport-obsessed Australia — in amongst boring matters like COVID-19 quarantine outbreaks and mass job losses — is the sudden resignation of Eddie McGuire, president of Collingwood Football Club for some 22 years.
The trigger for his departure came down to two words: in the press release following a damning review that found systemic racism within the club, McGuire declared it was a “an historic and proud day” for the club. That led to the usual snowball of criticism from Indigenous Australian leaders, former players, sponsors and of course the online lynch mob. Even the powerful McGuire was unable to withstand this, and ultimately caved.
But the story that needs to be told is not about racism, public gaffes, mealy mouthed apologies, or cancel culture. It’s actually about governance of what has become one of the most powerful AFL clubs (with much credit to McGuire himself).
When McGuire joined in 1998, Collingwood had a successful history as a club, but were floundering. Using his strong personal brand and network, he executed a number of bold moves to attract funds and talent to the club, and negotiated a venue change to Olympic Park. Within a few years, both the financial and on-field performance had turned around: Collingwood was a cash machine and a contender for the flag.
After ten or so years at the head, and aged in his mid 40s, he could have left the club, and pursued other interests. But ego and hubris seemed to keep him there. Collingwood was Eddie, and Eddie was Collingwood. And this was really the beginning of the end.
Sporting clubs in Australia are an interesting animal. The vast majority are non-profits, ‘owned’ by their members (unlike in the US and Europe). They put a bunch of men and women on the park every week during season to play the game, engage in significant community work, and own other assets that deliver a financial return to help fund their core operations.
They have several serious flaws when it comes to governance:
- Board and succession: directors are often appointed because of their wealth and influence. Significant financial support can be a prerequisite for a seat. It is only a minority of directors if any who have skills in governance and compliance. I tell the incoming president of any non-profit that their first and most important task is to identify and setup their exit. It’s very easy to join boards and committees, but not enough people know how to depart on the right terms.
- This board composition leads to a lot of big egos around the table (and the loudest voices are rarely the governance specialists). That in turn can lead to board-level influence over specific executive actions (e.g. hire or fire this player or coach) rather than strategic thinking. It also means directors may end up hanging around well beyond their use-by-date.
- Usually, the role of the board is to set strategy, and hire (or fire) the CEO. In AFL clubs, the board also hires and fires the (senior) coach, who is one of the higher-profile people at the club — the highest for some clubs. So who is really in charge? The CEO is responsible for the football operations department (where the coach sits), as well as the non-football department. This can lead to conflicts of interest and power struggles between directors, CEO, and coach.
Eddie McGuire was pushed to resign for reasons that are a reflection of the prevalent ‘cancel culture’. Until now, he was powerful enough to get away with a number of serious gaffes and club crises, but this was the straw that broke the camel’s back.
In his resignation speech, he remained defiant, declaring he was a “lightning rod for vitriol”. Collingwood is one of the most hated clubs in the AFL, and most people either loved or hated McGuire. He cannot play the victim here — as president, the buck stops with him, and he took way too long to address the serious issues of racism within the club. Indeed, he may have been part of the problem. That will remain a stain on his legacy.
The fact that he stayed for so long as president points to deep governance flaws within the club, and similar issues are systemic to the way football clubs operate. No-one is bigger than the club. Directors of all non-profits need to maintain a healthy sense of humility and remember at all times that they are servants of the organisation, not the reverse.
This was also posted at [Medium].