Review of the Registered Clubs Industry in NSW - Clubs NSW

6 Strengthening the financial viability of the registered
clubs industry
An effective board and management team strengthens a club’s financial viability, as
they can:
use appropriate financial planning and assess their club’s financial position
implement measures such as performance benchmarking and diversification
identify when it may be an appropriate time to consider amalgamation and
ensure the continued community ownership of club assets.
Stakeholders nominated three principal problems that limit club boards’
effectiveness:
1. deficiencies in director skill sets
2. difficulties in attracting suitably skilled and experienced directors
3. difficulties in electing suitably skilled and experienced directors.
Some directors do not have a strong grasp of risk management techniques, financial
concepts or the responsibilities attaching to their position. Many clubs are also
finding it difficult to attract qualified, adequately experienced people to stand for
their boards. And some clubs’ constitutional restrictions limit who can stand for
election or who is likely to be elected by the membership.
IPART has identified a suite of initiatives to address these problems, including:
Requiring all directors of clubs with gaming machine revenue greater than
$1 million a year to undertake core training on financial statements and directors’
duties. For clubs below this threshold, the board should be required to ensure
that at least two of its directors has completed the core training modules.
Encouraging clubs to remove any board or voting restrictions from their
constitutions. Where limitations remain, IPART considers that board-appointed
directors should be allowed.
Encouraging clubs to conduct performance assessments and have a formal
succession planning policy in place.
ClubsNSW more extensively promoting examples of effective corporate
governance and providing further guidance to clubs on best practice.
IPART also considers that there is scope for improving management effectiveness.
Therefore, it considers clubs should be encouraged to adopt a more rigorous
approach to recruiting management and assessing their performance.
In relation to training, IPART notes that there is already a wide array of training
options available for directors and managers of clubs. However, stakeholders
considered that factors such as time, cost and negative attitudes to formal education
were acting as barriers to directors and managers taking up these training options.
Therefore IPART considers action is needed to improve the existing training
opportunities, such as introducing more flexible delivery options.
Review of the Registered Clubs Industry in NSW IPART 105