Corporate Governance Of Football Clubs

Trust chair Keith Morgan

With recent turmoil surrounding the future of Bury and Bolton Wanderers, Trust chair Keith Morgan, a football finance expert calls for action over the way football clubs are run and owned, the so-called Owners and Directors Tests

At the Football Supporters’ Association Annual General Meeting held at the end of June 2019, attended by myself on behalf of Cardiff City Supporters’ Trust, one of the matters discussed was a paper concerning corporate governance of football clubs.

In particular, proposals made to the Football Association (at their request) recommending changes to how the FA ensured that football club owners  and the directors they appointed to run the clubs were “vetted” to try and ensure that they properly protect, sustain and run clubs in the long term interests of the fans and communities those clubs represent.

 The paper strongly recommended that those responsible for setting and monitoring compliance with these regulations should be independent of the clubs and their owners and directors.

The very sad recent news concerning Bury FC and Bolton Wanderers FC (now saved) has just served to strike home what an important issue this is, requiring urgent action by the football authorities acting in unison with fan representative bodies to minimise the risk of future similar damaging impact on the game of football as we know it.

Currently there are three sets of tests covering Owners and Directors – one for the Premier League( PL) , one for the English Football League(EFL) and one for the National League(NL). The paper proposed consolidating these into one consistent set of rules.

For owners, the paper proposes that anyone taking ownership of more than 25% of a club’s shares should firstly be required to pass a test proving that they have a sustainable business plan for the club and that they will appoint people to be the club’s directors that have the skills and experience to run it properly, including having satisfactory engagement with the club`s supporters and other stakeholders.

The paper, therefore, acknowledges that the owners themselves may not have the relevant football knowledge and skills, but that they should ensure that those they appoint to the board should and that they apply that knowledge and skill for the benefit of the football club.

Tests for both owners and directors would involve full disclosure of any previous personal insolvency issues, failures as a director of insolvent companies , criminal convictions etc. and that any such incidences should be regarded prima facie as a bar from becoming an owner or director. There would also be a bar on owners borrowing money to buy a club but giving the lender security over club assets for that lending .i.e. borrowing money personally, but leaving the burden of that lending to be met by the club.

There will now be undoubted further pressure from Football Supporters Association on the FA to bring about these changes to the regulations as soon as practicable.

Unfortunately it has taken the expulsion of a long standing football club to make it more likely to take heed of the warnings set out in the paper.

Keith Morgan