Review of the Registered Clubs Industry in NSW - Clubs NSW

6 Strengthening the financial viability of the registered
clubs industry
Skills and effectiveness of a club’s board and management
IPART found that the skills and effectiveness of a club’s board and management
team have an important bearing on its financial viability. While stakeholders
generally noted that corporate governance had improved since the major reforms in
2003, they argued that the next major corporate governance goal should be to
improve the quality of club boards. For example, at the first Sydney roundtable,
Bowls NSW cited the quality of elected boards as the greatest issue facing clubs. 102 It
put the view that there were far too many board members who, while wellintentioned
and passionate about the club, didn’t have the necessary skills to
effectively direct a business, which in many instances had a turnover of millions of
dollars. ClubsNSW also argued that there is a greater need for directors to have
capabilities in areas in which they are currently lacking, such as strategic planning,
risk assessment and monitoring financial performance. 103
Similarly, many of IPART’s case study clubs identified the board’s financial skills as
imperative to the club’s financial viability. However, IPART found that it was often
difficult to judge the level of expertise a board had by indicators such as the
members’ occupations and qualifications. In addition, stakeholders identified that
clubs without full-time managers were also especially vulnerable financially. 104
Chapter 9 discusses the importance of clubs’ boards and management in ensuring
their financial viability in more detail.
A club’s understanding of its own financial position
ClubsNSW acknowledged that many clubs were multi-million dollar businesses and
the business practices within these clubs needs to be consistent with this. 105 In
particular, such clubs need robust and consistent financial reporting and
benchmarking to support their management’s decision-making and ensure their
long-term financial viability.
IPART’s review of its case study clubs found that the quality and degree of
consistency in financial reporting and analysis varies significantly within the clubs
industry. While some of the case study clubs regularly produce detailed financial
performance reports and analyses, others (often smaller clubs) produce little more
than what is required by their statutory obligations. The financial management
reporting frameworks of case study clubs largely depended on the expertise and
experience of individual club managers, as well as the demands of the board.
Formalised budgeting processes, completion of ongoing strategic plans and the use
of benchmarking information on key performance measures varied greatly.
102 Bowls NSW, Sydney roundtable, 27 August 2007, p 25.
103 ClubsNSW submission, 31 July 2007, p 158.
104 ClubsNSW, Sydney roundtable, 27 August 2007, p 30; Leagues Clubs’ Association, Wagga Wagga
roundtable, 14 September 2007, p 30.
105 ClubsNSW, Sydney roundtable, 27 August 2007, p 25.
Review of the Registered Clubs Industry in NSW IPART 99