Issues of governance in sport organisations: a question of board size, structure and roles

CHIEN MU YEH, TRACY TAYLOR
University of Technology, Sydney

Abstract
Governance is a critical component of the effective management of a sport organisation. Due to the changing nature of sport organisations, most notably the movement to adopt business models of operation, questions of appropriate forms of governance have attracted increasing research attention in the sport sector. This paper reviews the governance literature in sport management, and discusses issues of board roles and board composition. Four governance theories are presented to help us better understand how to interpret the function of board roles in sport organisations. We conclude by suggesting future research directions.

Keywords: sport organisation; sport governance; board governance; board composition; board role

Introduction

Contemporary sport organisations face an array of performance pressures from the public, the organisations' members and the government. Escalating pressures include increased revenue generation, attracting higher membership numbers, and the provision of more member services, while at the some time producing world champion athletes or teams. Governance is a critical component of managing a sport organisation since it is concerned with issues of policy and direction for the performance of sport organisations (Ferkins, Shilbury, & McDonald, 2005; Hoye, 2006; Hoye & Auld, 2001)

With an appropriate governance system in place, organisational activities can be monitored to deliver benefits to sport organisations, members and society (Hoye, 2006; Mason, Thiboult, & Misener, 2006). The failure to have an appropriate governance to control and monitor sport organisations can result in withdrawal of sponsorship, decline in membership numbers and participation and possible intervention from external agencies (UK Sport, 2004). In a governance system, the board is a critical mechanism because its main responsibility is to make certain that the activities of the organisation are carried out in the best interests of the organisation, its members and society. Good corporate governance acts to ensure that sport organisations are viable and effective in the present and future (Australian Sports Commission, 2005). However, in spite of the importance of effective governance, it has been acknowledged that little research has been under taken to investigate sport governance (Forster, 2006; Hindley, 2003).

The purpose of this paper is to examine current literature about sport governance and board governance and to identify research gaps. To do this we briefly discuss the unique characteristics of sport organisations and present definitions of sport governance. Literature regarding sport governance with a particular emphasis on board governance, board roles and board composition is reviewed followed by a discussion of existing models of governance. We conclude by suggesting future research directions.

Sport organisations and definitions of sport governance

Sport organisations exist to provide sport products and services in the sport industry (Chelladurai, 2005). Many researchers have documented the distinctive characteristics of sport organisations and the list is relatively consistent (Chelladurai, 2005; Slack & Parent, 2006; Smith & Stewart, 1999). One critical difference between sport organisations and business organisations is the way they measure performance (Smith & Stewart, 1999). The main purpose of business organisations is to make a profit. On the other hand, fans or members of sport organisations commonly measure performance on the basis of championship. Profits made by a sport organisation might not satisfy fans and members if it finishes a season at the bottom. While many sport organisations such as sporting good manufacturers and athlete management companies are considered as for profit organisations, the majority of sport organisations that provide participation opportunities and promote sport are categorized as non-profit sport organisations (Hoye & Cuskelly, 2007). A nonprofit board ensures that a sport organisation conducts its mission without striving to make a profit and that the benefits it creates are delivered to its members or individuals it exists to serve (Hoye & Cuskelly, 2007). A volunteer board at the top of a hierarchy of authority is the most common governance structure present in sport organisations (Kikulis, 2000).

While there has been no one agreed definition of sport governance, Hums and Maclean (2004: 5) defined sport governance as 'the exercise of power and authority in sport organisations, including policy making, to determine organisational mission, membership, eligibility, and regulatory power, within the organisation's appropriate local, national, or international scope.' Hoye and Cuskelly (2007:9) defined sport governance as 'the structure and process used by an organisation to develop its strategic goals and direction, monitor its performance against these goals and ensure that its board acts in the best interests of the members.'

These definitions encapsulate four concepts: power, direction, control and regulation. Governing sport organisations includes granting certain people within sport organisations power to do something they would not have otherwise done. Governance also includes giving sport organisations a direction or a strategy designed to achieve their goals. Controlling function is the third concept of sport governance. Activities of sport organisations should be controlled to ensure that the activities are congruent with organisations' interests and that sport organisations work toward an agreed direction. The last concept is regulation. It involves establishing rules, guidelines and policies for members to follow. If necessary, sport organisations could impose punishment if compliance requirements are not met (Ferkins et al., 2005; Hoye & Cuskelly, 2007; Hums & Maclean, 2004; Slack & Parent, 2006).

These concepts suggest that sport governance aims to ensure that the board seeks to deliver outcomes for the benefits of sport organisations and their members and that the means used to achieve these outcomes are monitored effectively (Hoye & Cuskelly, 2007). In a sport organisation, the board is generally granted power to establish or ratify strategies, monitor activities carried out to achieve strategies and impose punishment if members violate rules. While sport governance does not only concern the board, the board plays a vital role in sport organisations and defining sport governance. Therefore it is relevant to under-stand the literature on board governance and the findings of previous governance research in sport management.

Governance research in sport management

Extant governance research in sport management has been mainly concerned with governance in global sport organizations (Forster, 2006), corporate governance in professional sport clubs (Michie, 2000; Michie & Oughton, 2005), applying agency theory to sport organisations (Mason, 1997; Mason et al., 2006), and board and staff relationships (Hoye, 2004, 2006). Table 1 provides a summary of existing governance literature in sport management.

Table l. Governance literature in sport management

Sub theme	Author	Research focus/findings
Global sport organisations	Forster (2006)	Examined governance of global sport organisations
Corporate governance	Michie (2000)	Examined ownership and governance options for professional football clubs in UK
	Michie & Oughton (2005)	Examined the corporate governance practices at football clubs in UK
Agency theory	Mason et al. (2006)	The IOC should separate management and control functions
	Mason (1997)	Used agency theory to interpret the increases in revenues and explain how to decrease opportunistic behaviors by team owners in NFL
Leader member exchange	Hoye (2004, 2006)	Higher-quality relationships existed between board chairs and executives than between these two parties and board members; board performance was positively related to the perception of leader-member exchanges
Social constructionist approach	Hoye & Cuskelly (2003)	Board-executive relationships were perceived positively by effective boards
	Hoye & Auld (2001)	Self Assessment for Non-profit Governing Boards scale was found to be a valid and reliable scale. Effective boards were better at conducting their responsibilities than ineffective boards
Board roles	Inglis (1997)	Empirically examined board roles in Canadian sport organizations

 

In research on governance problems in global sport organisations (GSOs), Forster (2006: 72) defined global sport organisations as 'the supreme organs of governance in sport whose authority is global'. These organisations include the International Federation of Football Associations (IFFA), the International Olympic Committee (IOC), the International Association of Athletic Federations (IAAF) and so forth. Forster (2006) argued that some of these organisations have selfgovernance problems. For example, the Court of Arbitration for Sport (CAS) was formally separated from the IOC in 1993/94 but the president of CAS is a vice president of IOC. Therefore, there have been questions about the impartiality of CAS due to its association with the IOC. There also have been a number of scandals within the IOC and FIFA concerning the ethical behavior of board members (Davies, 1999).

The governance issues of the IOC have generated much discussion. The IOC has conducted several reforms in its structure and governance, such as changes to the age of retirement, limiting terms of IOC members to eight years subject to re-election, including active athletes and presidents of international federation as members. However, Mason et al. (2006) argued that the IOC should do more. They suggested that the IOC members should have more stakeholders who have benefits from IOC, such as media and corporate sponsors. Moreover, they suggest that three control systems should be introduced into the IOC, including decision hierarchies, mutual monitoring systems and a board of directors. More importantly, management and control functions should be separated. The board should be responsible for control functions and agents handle management functions.

Hoye and Auld's (2001) study of board performance of Australian sport organisations found that effective boards are better at conducting their responsibilities than ineffective boards in aspects such as financial management, setting and reviewing the mission, conducting meetings, strategic planning, monitoring program performance, risk management, selecting board members, and marketing. Hoye and Cuskelly (2003) also found that board-executive relationships were perceived positively by effective boards but less so by ineffective boards. They asserted that mutual trust, board leadership, information control and responsibilities were key elements in board-executive relationships and were related to board performance.

Based on the leader-member exchange theory, Hoye (2004) found that 'that board chairs and executives perceived the quality of their leader-member exchanges to be higher than their respective relationship with board member' (p.55) and that the board performance was positively related to the perception of higher-quality leader-member exchanges. Following this, Hoye (2006) went on to explore further aspects of the leader-member relationship. He found that the organisational leadership was derived from either board chairs or executives. A mature working relationship was developed when executives supported leadership of the board chair.

Researchers have used board of directors as respondents to examine issues of cohesion (Doherty & Carron, 2003), and perceptions of distributive justice (Mahony, Hums, & Riemer, 2002, 2005). Canadian voluntary sport organisations have been investigated for organisational change (Amis & Slack, 1996; Amis, Slack, & Hinings, 20046; Auld & Godbey, 1998; Cousens, 1997; Kikulis, 2000; Kikulis, Slack, & Hinings, 1995; Stevens, 2006). Auld and Godbey (1998) discussed the relationship between professionals and board members in the change process, such as conflicts over the control of decision making. Amis and Slack (1996) examined the organisation's size-structure relationship when organisations were engaged in the change process. The latter study also found that most decisions were made by board members and did not decentralize to the professionals. Table 2 summarizes the research partially focusing on governance in sport organisations.

Within the growing governance literature in sport management there has been increasing attention on board governance due to the importance of boards in the decision making and strategic direction of organisations. Additionally, many countries have introduced legislation and policies governing the composition of boards, and funding bodies have started to tie monies distributed to sport organisations to aspects concerning board composition. The next sections will discuss board governance, particularly board composition and board roles.

Table 2. Non-governance-based research in sport management

Major theme	Author	Research focus/findings
Organisational change	Kikulis et al. (1995)	Identified three organisational archetypes of Canadian National Sport Organisations: Kitchen Table, Board and Executive Office
	Amis & Slack (1996)	Mainly examined the size-structure relationship but found most decisions were still made by board members
	Cousens (1997)	Identified two organisational archetypes of AAA baseball franchises
	Auld & Godbey (1998)	Some areas of decision making were perceived to be the domain of either the board members or professionals
	Kikulis (2000)	Used the institutional theory to explain three organisational archetypes and decision making
	Stevens (2006)	Apart from the three archetypes identified by Kikulis et al. (1995), Amateur Sport Enterprise archetype coexists
Distributive justice	Mahony et al. (2002, 2005)	Examined board chairs' perceptions of distributive justice
Task & social cohesion	Doherty & Carron (2003)	Examined board cohesion in Canadian non-profit sport organizations

Board roles

Board roles vary according to industry and organisational type, including profit organisations, (Blair, 1995; Clarkson, 1995; Fama & Jensen, 1983; Huse, 2005; Lynall, Golden, & Hillman, 2003; McNulty & Pettigrew, 1999), non-profit organisations (Cadbury, 2002; Carver, 1997; Houle, 1989; Pointer & Orlikoff, 2002) and sport organisations (Australian Sports Commission, 2005). Table 3 exhibits the range of these differences.

Empirical investigations of what board members actually do in their sport organisotions (Inglis, 1997; Shilbury, 2001) are rather sparse. Inglis (1997) surveyed executive directors, board presidents and board members of Canadian Provincial Sport Organisations to empirically investigate the board roles and found that board roles include four factors and 16 items. These were: Mission - ethical responsibilities, following charters, and keeping policies in line with mission; Planning - financial policy, budget allocations, human resources and long-range plans and strategies; Executive Director- hiring and monitoring of the executive directors as well as concern for fulfilling legal responsibilities; and Community Relations - developing and delivering specific programs and services, representing the interest of certain groups, raising funds, and promoting advocacy and community relations. A significant difference in the perception of importance and performance for the board roles between paid staff and board members and male and female members was found and Inglis (1997:174) suggested, 'understanding additional explanations for varying perceptions of the roles by gender should be a focus for further research.

Miller-Millesen (2003) asserted that while there are different governance theories regarding board roles, there is no grand governance theory covering all board roles because each governance theory focuses on different roles of board members. He posited that theoretical origins of the best practice of board roles come from agency theory, resource dependence theory and institutional theory.

Table 3. Board roles in different types of organisations

Type of organization	Board roles
Profit organization	• Develop organisation's missions and policy • Ratify strategies • Appoint, advise, replace, reward and evaluate CEOs/Managers • Oversee managerial activities • Report to owners/shareholders • Manage the relationship with external environment • Advance organisational image • Assure related legislations are met • Financial management
Non-profit organisation	• Determine organisation's mission and policy • Strategic planning • Monitor and assess programs and services • Appoint, monitor, evaluate, reward, replace and work with the executive • Assure that the organisation meets all legal requirements • Secure financial resources and manage financial matters • Manage the relationship with external environment • Appraise itself
Sport organisation	• Develop, formulate and monitor strategies • Formulate policies • Enhance sports organisations' public image • Review and monitor managerial activities and performance • Report to members and stakeholders • Employ, evaluate, provide advice and reward executives • Ensure organisational compliance with related legislations • Manage financial resources • Develop a risk managing plan • Self-assess • Initiate board development activities

 

Agency theory
Agency theory (Fama & Jensen, 1983; Jensen & Meckling, 1976) can be used to frame the relationship between CEOs/managers (agents) and owners (principals). From this perspective the board is a mechanism to monitor managerial behavior and to assure that managerial activities are aligned with the principals' interests (Fama & Jensen, 1983; Rhoades, Rechner, & Sundaramurthy, 2000). The board of directors should control CEOs/managers and ensure that their organisation engages in activities that are congruent with community expectations (Clarke, 2004; Fama & Jensen, 1983; Gibelman, Gelman, & Pollack, 1997; Miller-Millsesn, 2003; Rhoades et al., 2000). The board roles, therefore, include hiring, replacing, monitoring, assessing and compensating CEOs/managers, developing missions, approving and evaluating programs/services, allocating resources, managing finance, as well as ratifying major strategies/decisions made by management (Fama & Jensen, 1983; Fligstein & Freeland, 1995; Forbes & Milliken, 1999; Miller-Millsesn, 2003). The concept of owners is not directly relevant to many non-profit sport organisations. Mason et al. (2006) argued that "principals" in nonprofit sport organisations are the parties that receive the benefits of the achievements. This could be the organisation itself and multiple stakeholders, such as members, clients, governments, volunteers, society and sponsors. In this schema the agents are the paid staff responsible for the organisation's operation. The board of directors is the mechanism to ensure that paid staff behave in a manner that befits the interests of multiple stakeholders.

While agency theory addresses the monitoring and controlling role of a board it has limitations. Firstly, agency theory is a simplified model. It assumes there are only two main participants - the principal and the agent - in organisations (Daily, Dalton, & Cannella, 2003). In reality, organisations are comprised of more than two members. A board interacts with organisational members other than just CEOs/managers, such as providing consultation to other members. Secondly, it is likely that when CEOs/managers serve an owners' interests, their interests are satisfied at the same time (Lane, Cannella, & Lubatkin, 1998). Therefore, the board may not only monitor CEOs/managers but also assist CEOs/ managers to achieve organisational goals. Thirdly, to protect their careers and reputation in the managerial market, CEOs/managers are likely to behave in a manner aligned with the owners' interests (Kosnik, 1987). In this situation, the board may pay less attention to monitoring CEOs/managers. An additional limitation of agency theory is that organisations operate in an open system, and they influence and are influenced by the external environment in which they operate (Chelladurai, 2005). However, agency theory assumes that board effectiveness is only associated with good monitoring functions. Therefore, researchers have used resource dependency theory, institutional theory and stakeholder theory to further explain the relationship between organisations and the external environment.

Resource dependency theory
Resource dependency theory states that organisational survival is based on organisational capabilities to acquire and maintain resources essential to the organisation (Pfeffer & Salancik, 1978). In resource dependence theory the board of directors serves as a mechanism connecting the organisations with external resources (Hillman, Cannella, & Paetzold, 2000; Miller-Millsesn, 2003). The duties of directors are to reduce external uncertainty, access needed information, bring resources and represent the organisations (Daily, Dalton, & Rajagopalan, 2003; Hillman et al., 2000; Lynall et al., 2003; McNulty & Pettigrew, 1999; Miller-Millsesn, 2003). Resource dependency theory is mainly used to explain the roles of non-profit boards (MillerMillesen, 2003). When organisations are in a stable environment, the board is less likely to engage in helping organisations to access external resources. In this case, the board may primarily engage in administrative functions (Miller-Millsesn, 2003).

Institutional theory
In complement, institutional theory emphasizes the importance of normative structure and rules in guiding and constraining organisational behaviors (Lynall et al., 2003; Miller-Millsesn, 2003). The main concept behind the institutional theory is that a particular pattern of doing things evolves over time and becomes legitimated. The organisation changes structure, processes or behaviors to meet normative or moral requirements (Luoma & Goodstein, 1999; Pfeffer, 1982). As such, if boards have similar roles, it is the result of these roles having become accepted ways or a result of coercion (Miller-Millsesn, 2003). Board roles in institutional theory include attending meetings, adhering to related laws/regulations, filing required documents, insisting on sound financial management tools and avoiding conflict-of-interests situations (Ingram, 2003; Miller-Millsesn, 2003). Through coercive, mimetic or normative processes, organisations of the same type will gradually become similar (DiMaggio & Powell, 1983). Organisational practices are also able to be predicted by reviewing organisational history or industry traditions (Eisenhardt, 1988).

Institutional theory does not fully explain why and how organisations are likely to resist change. Resistance come from the opposition of interest groups, high cost of change or lack of understanding of change (Slack & Parent, 2006). In this situation, the board may have to enter into negotiation with members in order to accept change or develop alternative strategies to replace the change. For some types of organisations, such as non-profit national sport organisations, failure to comply with institutional expectations may result in, for example, the loss of government subsidies. Therefore, the government may force non-profit national sport organisations to accept change even though they may be psychologically resistant. In this situation, it is likely that compliance is just symbolic so that the institutional force has little impact on the organisation (Luoma & Goodstein, 1999; Stone, Bigelow, & Crittenden, 1999). The board may just complete required paperwork rather than strategically engage in change.

Stakeholder theory
Stakeholder theory can also be used to better understand the board roles in sport organisations. Stakeholder theory contends that the organisation should govern the relationship with various stakeholders (Clarke, 2004). For profit sport organisations, stakeholders include shareholders, employees, members, and suppliers. For non-profit sport organisations, there are many stakeholders and these can include sponsors, funding bodies, staff, general public, communities, and government (Australian Sports Commission, 2005). Organisations can serve a wide range of social purposes and create value for stakeholders (Blair, 1995; Clarke, 1998; Clarkson, 1995). Due to these multiple stakeholders, organisations have to balance the interests of various stakeholders and the primary board role is to identify, understand and satisfy the needs of stakeholders (Carver, 1997). However, shareholders/owners own equity, and have rights to manage and control organisations and the board may be asked by shareholders/owners to perform tasks that do not necessarily meet stakeholders' interests. The board may spend much of its time on communicating, negotiating or develop multiple programs for various stakeholders.

Each theory outlined above has been based on corporate governance rather than on sport governance. While research on sport governance has been increasing, there have been few empirical studies that focused on board roles in sport organisations (Inglis, 1997; Shilbury, 2001). Among the few studies, no theoretical frameworks were applied. The above theories offer a foundation for sport governance. Sport researchers can examine whether these theories can be transferred from corporate governance. Moreover, researchers have argued that no single theory can fully explain the range of board roles and responsibilities. Thus it seems that a multitheoretic approach will best help us to understand board roles (Clarke, 2004; MillerMillesen, 2003).

Board composition

Does size matter?
There are a number of propositions about the optimum size of a board. Agency theory suggests that board members are selected to manage relationships between the board and the manager and board size should be enough to prevent managerial hegemony (Miller-Millsesn, 2003). Resource dependence theory advocates that a large board has the ability to link the organisation to the external environment and secure critical resources as well as being likely to provide the knowledge and skills needed (Goodstein, Gautam, & Boeker, 1994). Pfeffer and Soloncik (1978:172) noted 'the greater the need for effective external linkage, the larger the board should be.' If boards are trying to reduce external uncertainty, board members should have explicit abilities to reach their goals and the board size should be large enough to provide a wide diversity (Abzug, 1996; Luoma & Goodstein, 1999). Zahra and Pearce (1989) asserted a large board size means the company has a better ability to understand and respond to diverse stakeholders. They also argued that a large board size could reduce the possibility of the CEO's control of the board and provide more talent to lead the organisation (Chaganti, Mahajon, & Sharma, 1985). Zahra & Pearce (1989) have empirically demonstrated that firms with a good financial performance have a larger board size (10-15 board members) than failing firms.

However, Herman (1981) and Goodstein et al. (1994) contend that large boards are weak boards as in-depth discussion becomes unlikely; diversity, contention, fragmentation and factions make it harder for the board members to work as a group and reach an agreement. Large boards may also be less participative, less cohesive and less likely to reach an agreement. Difficulties in communication and inhibition of the strategic action might exist which in turn limit the board members' contributions (Dalton, Daily, Johnson, & Ellstrand, 1999; Forbes & Milliken, 1999; Goodstein et al., 1994). Jensen (1993) suggested that a small board can help organisations improve performance. Empirical studies have also shown that small boards can help firms gain better financial performance (Daily, Certo, & Dalton, 1999; Yermack, 1996).

It is apparent that empirical studies on board size have inconsistent findings. Most researchers have found that the board sizes are larger in non-profit organisations (Callen, Klein, & Tinkelmon, 2003; Cornforth & Simpson, 2003; Provan, 1980; Unterman & Davis, 1982) with sometimes as many as 30 members (National Center for Non-profit Boards, 1996; Oster, 1995). With a large board, non-profit organisations can have better ability to access external resources and can satisfy the desire for the volunteers' involvement. Some non-profit researchers had also tried to determine if there is a linkage between board size and board performance. Olson (2000) found that there is a positive relationship between board size and donations. However, in other research Miller, Weiss, and MacLeod (1988) and Bradshaw, Murray and Wolpin (1992) discovered that the board size was not related to board performance.

In summary, the question of board size remains controversial. However, there is a relative consensus that non-profit organisations have a larger board than profit organisations because the former's survival is mainly dependent on external resources, such as donations or government subsidies. When an organisation needs external resources to survive, it tries to recruit as many board members as possible to secure external resources and to create an extensive networking (Brown & Iverson, 2004; Miller-Millsesn, 2003; Rhoades et al., 2000). Little research has been conducted to examine the issue of board size in sport organisations. However, it is reasonable to anticipate that profit sport organisations will have a larger board size than non-profit sport organisations.

Board independence
Board independence has been primarily explored using agency theory. Agency theory argues that to effectively monitor the CEO/manager, organisations should have a monitor mechanism in place that can oversee and control CEOs/managers and protect the stakeholders. In turn, organisations will have a better performance (Fama & Jensen, 1983; Finkelstein & Mooney, 2003; Rhoades et al., 2000). An independent board or board with outside members is widely considered an appropriate mechanism (Fama & Jensen, 1983). Agency theorists suggest that a dependent board or a board with insiders, such as current or former managers/employees of the organisation, or those who are dependents of the organisations, is less likely to monitor the CEO and the independent board is more vigilant to oversee CEOs/managers (Dalton, Daily, Ellstrand, & Johnson, 1998; Fama & Jensen, 1983). Establishing a board with mostly external members is useful to connect with multiple stakeholders and can include voices and understanding from various stakeholders.

There is almost uniform agreement in the literature that an effective board is independent (Dalton et al., 1998). Jensen (1993) noted that CEOs/managers can be board members because they generally have intimate knowledge of the organisation and their knowledge can help the board make appropriate decisions. Links between board independence and financial performance have been inconclusive, finding the relationship positive (Dalton et al., 1998; Rhoades et al., 2000; Zahra & Pearce 1989), negative (Agrawal & Knoeber, 1996; Beatty & Zajac, 1994; Kesner, 1987; Pearce, 1983), and not related (Bhagat & Black, 1999; Chaganti et al., 1985; Finkelstein & Mooney, 2003; Hermalin & Weisbach, 1991; Johnson, Ellstrand, & Daily, 1996; Kesner, 1987). In summary, board independence is regarded as a mechanism for organisations to monitor CEOs/managers. When this mechanism is effectively in place, CEOs/ managers would act in the interests of stakeholders and in turn benefit organisational performance. In sport governance, we know little about the issue of how organizational effectiveness and success relate to board independence.

Conclusion

Governance is a critical component of managing sport organisations; how to best monitor organisational activities, deliver benefits to organisations and guide an organisation is critical to organisational sustainability. The board plays a significant role in a governance system because decisions made by the board can affect the entire organisation. The literature review presented here has suggested that we can draw on existing theories to understand how boards work and use this information to design appropriate board structures for sport organisations. Empirical studies should be conducted to examine board composition in sport organisations, such as board size and board independences.

Future research is needed to explore the differences in board roles and board composition between profit and non-profit sport organisations, between national and local sport organisations, between professional and amateur sport organisations, and between Western and Non-Western sport organisations. It has been argued here that sport organisations are in a dynamic and competitive environment (Amis, Slack, & Hinings, 2004a). Comparing the differences in board governance within the sport sector can help sport organisations understand themselves and their rival organisations and in turn stand out in a competitive environment. According to an ancient Chinese military treatise, titled The Art of War written during the 6th century BC by Sun Tzu, if you know both yourself and your enemy, you will come out of one hundred battles with one hundred victories (Tan, 2001). In addition, examining differences in board governance between sport and non-sport sectors can not only help us clarify differences between the sport sector and non-sport sectors but also help researchers develop a framework or a theory for sport governance.

REFERENCES
Abzug, R. (1996). The evolution of trusteeship in the United State: A roundup of finding from six cities. Non-profit Management & Leadership, 7, 101-111.

Agrawal, A., & Knoeber, C. R. (1996). Firm performance and mechanisms to control agency problems between managers and shareholders. Journal of Financial and Quantitative Analysis, 31(3), 377-397.

Amis, J., & Slack, T (1996). The Size-Structure Relationship in Voluntary Sport Organizations. Journal of Sport Management 10, 76-86.

Amis, J., Slack, T, & Hinings, C. R. (2004a). The pace, sequence, and linearity of radical change. Academy of Management Journal, 47(1), 15-39.

Amis, J., Slack, T, & Hinings, C. R. (2004b). Strategic Change and the Role of Interests, Power, and Organizational Capacity. Journal of Sport Management 18, 158-198.

Auld, C. J., & Godbey, G. (1998). Influence in Canadian National Sport Organizations: Perceptions of Professional and Volunteers. Journal ofSport Management, 12, 20-38.

Australian Sports Commission. (2005). Governing Sport. Canberra: Australian Sports Commission.

Beatty R. P, & Zajac, E. J. (1994). Managerial Incentives, Monitoring, and Risk Bearing: A Study of Executive Compensation, Ownership, and Board Structure in Initial Public Offerings. Administrative Science Quarterly, 39(2), 313-335.

Bhagat, S., & Black, B. (1999). The uncertain relationship between board composition and firm performance. The Business Lawyer, 54(3), 921-963.

Blair, M. M. (1995). Ownership and Control: Rethinking Corporate Governance for the Twenty-First Century. In T Clarke (Ed.), Theories of Corporate Governance. New York: Routledge.

Bradshaw, P, Murray, V, & Wolpin, J. (1992). Do Non-profit Boards Make a Difference? An Exploration of the Relationship Among Board Structure, Process and Effectiveness. Non-profit and Voluntary Sector Quarterly, 21(3), 227-249.

Brown, W. A., & Iverson, J. 0. (2004). Exploring Strategy and Board Structure in Non-profit Organization. Non-profit and Voluntary Sector Quarterly, 33(3), 377-400.

Cadbury, A. (2002). Corporate governance and chairmanship: a personal view. Oxford: Oxford University Press.

Callen, J. L., Klein, A., & Tinkelman, D. (2003). Board Composition, Committees, and Organizational Efficiency: The Case of Nonprofits. Non-profit and Voluntary Sector Quarterly, 32(4), 493-520.

Carver, J. (1997). Boards that make a difference a new design for leadership in non-profit and public organizations. San Francisco, Calif.: Jossey-Bass.

Chaganti, R. S., Mahajon, V, & Sharma, S. (1985). Corporate board size, composition, and corporate failures in retailing industry. Journal of Management Studies, 22(4), 400.

Chellodurai, P (2005). Managing organizations for sport and physical activity. Scottsdale, Arizona Holcomb Hathaway.

Clarke, T (1998). The stakeholder corporation: A business philosophy for the information age. Long Range Planning, 31(2), 182-194.

Clarke, T (2004). Introduction: Theories of Governance-Reconceptualizing Corporate Governance Theory After the Enron Experience. In Clarke T (Ed.), Theories of corporate governance: the philosophical foundations of corporate governance (pp. 1-30). New York: Routledge.

Clarkson, M. E. (1995). A stakeholder framework for analyzing and evaluating corporate social performance. Academy of Management Review, 20(1), 92-117.

Cornforth, C., & Simpson, C. (2003). The changing face of charity governance: The impact of organizational size. In C. Cornforth (Ed.), The Governance of Public and Non-profit Organizations. NY: Routledge.

Cousens, L. (1997). From Diamonds to Dollars: The Dynamics of Change in AAA Baseball Franchises. Journal of Sport Management, 11, 316-334.

Daily, C. M., Certo, S. T, & Dalton, D. R. (1999). A decade of corporate women: some progress in the boardroom, none in the executive suite Strategic Management Journal, 20(1), 93-100.

Daily, C. M., Dalton, D. R., & Cannella, A. A. (2003). Corporate governance: decades of dialogue and data. Academy of Management Review, 28(3), 371.

Daily, C. M., Dalton, D. R., & Rajagopolon, N. (2003). Governance through ownership: centuries of practice, decades of research Academy of Management Journal, 46(2), 151-158.

Dalton, Daily, C. M., Ellstrand, A. E., & Johnson, J. L. (1998). Meta-analytic reviews of board composition, leadership structure, and financial performance. Strategic Management Journal, 19(3), 269-290.

Dalton, D. R., Daily, C. M., Johnson, J. L., & Ellstrand, A. E. (1999). Number of directors and financial performance: a meta-analysis Academy of ManagementJournal, 42(6), 674-686.

Davies, A. (1999). A strategic approach to corporate governance. UK: Gower.

DiMaggio, P J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48, 147-160.
Doherty, A. J., & Carron, A. V. (2003). Cohesion in Volunteer Sport Executive Committees. Journal of Sport Management 17, 116-141.

Eisenhardt, K. M. (1988). Agency-and institutional-theory explanations: the case of retail sales compensation. Academy of Management Journal, 31(3), 488.

Fama, E. F, & Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 26, 301-326.

Ferkins, L., Shilbury, D., & McDonald, G. (2005). The Role of the Board in Building Strategic Capability: Toward an Integrated Model of Sport Governance Research. Sport Management Review, 8(3), 195-225. Finkelstein, S., & Mooney, A. C. (2003). Not the usual suspects: How to use board process to make boards better. Academy of Management Executive, 17(2), 101-113.

Fligstein, N., & Freeland, R. (1995). Theoretical and Comparative Perspectives on Corporate Organization. Annual Review of Sociology, 21, 21-43.

Forbes, D. P, & Milliken, F. J. (1999). Cognition and corporate governance: understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24(3), 489-505.

Forster, J. (2006). Global sports organizations and their governance. Corporate Governance, 6(1), 72-83. Gibelmon, M., Gelman, S. R., & Pollock, D. (1997). The Credibility of Non-profit Boards: A View from the 1990s and Beyond. Administration in Social Work, 21(2), 21-40.

Goodstein, J., Gautom, K., & Boeker, W. (1994). The effects of board size and diversity on strategic change. Strategic Management Journal, 15, 241-250.

Hermalin, B. E., & Weisbach, M. S. (1991). The effects of board composition and direct incentives on firm performance. Financial Management 20(4), 185-206.

Herman, E. S. (1981). Corporate control, corporate power. New York: Cambridge University Press. Hillman, Cannella, A. A., & Poetzold, R. L. (2000). The Resource Dependence Role of Corporate Directors: Strategic Adaptation of Board Composition in Response to Environmental Change. Journal of Management Studies, 37(2), 235-256.

Hindley, D. (2003). Resource Guide in: Governance & Sport: LTSN Hospitality, Leisure, Sport & Tourism.

Houle, C. 0. (1989). Governing boards : their nature and nurture. San Francisco: Jossey-Bass.

Hoye, R. (2004). Leader-Member Exchanges and Board Performance of Voluntary Sport Organizations. Non-profit Management & Leadership, 15(1), 55-70.

Hoye, R. (2006). Leadership within Australian Voluntary Sport Organization Boards. Non-profit Management & Leadership, 16(3), 297-313.

Hoye, R., & Auld, C. (2001). Measuring board performance in non-profit sport organizations. Australian Journal of Volunteering, 6(2), 109-116.

Hoye, R., & Cuskelly, G. (2003). Board - Executive Relationships within Voluntary Sport Organisations. Sport Management Review, 6(1), 53-74.

Hoye, R., & Cuskelly, G. (2007). Sport Governance. Boston: Elsevier.

Hums, M. A., & MacLeod, J. C. (2004). Governance and policy in sport organisations. Arizona: Holcomb Hathaway.

Huse, M. (2005). Accountability and Creating Accountability: a Framework for Exploring Behavioural Perspectives of Corporate Governance. British Journal of Management 16, 65-79.

Inglis, S. (1997). Roles of the Board in Amateur Sport Organizations. Journal of Sport Management, 11, 160-176.

Ingram, R. T (2003). Ten basic responsibilities of non-profit boards. Washington, DC: National Center for Non-profit Boards.

Jensen, M. C. (1993). The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems. Journal of Finance, 48(3), 831-880.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.

Johnson, Ellstrand, A. E., & Daily, C. M. (1996). Boards of Directors: A Review and Research Agenda. Journal of Management 22(3), 409.

Kesner, I. F., (1987). Directors' stock ownership and organizational performance: An investigation of Fortune 500 companies. Journal of Management 13, 499-508.

Kikulis, L. M. (2000). Continuity and Change in Governance and Decision Making in National Sport Organisations: Institutional Explanations. Journal of Sport Management, 14, 293-320.

Kikulis, L. M., Slack, T, & Hinings, C. R. (1995). Toward an understanding of the role of agency and choice in the changing structure of Canadian National Sport Organizations. Journal of Sport Management 9, 135-152.

Kosnik, R. D. (1987). Greenmail: A Study of Board Performance in Corporate Governance. Administrative Science Quarterly, 32(2), 163.

Lane, P J., Cannella, A. A., & Lubatkin, M. H. (1998). Agency problems as antecedents to unrelated mergers and diversification: Amihud and Lev reconsidered. Strategic Management Journal, 19(6), 555-578.

Luoma, P, & Goodstein, J. (1999). Stakeholders and corporate boards: institutional influences on board composition and structure. Academy of ManagementJournal, 42(5), 553-563.

Lynall, M. D., Golden, B. R., & Hillman, A. J. (2003). Board composition from adolescence to maturity: a multitheoretic view. Academy of Management Review, 28(3), 416.

Mahony, D. F., Hums, M. A., & Riemer, H. A. (2002). Distributive Justice in Intercollegiate Athletics: Perceptions of Athletic Directors and Athletic Board Chairs. Journal of Sport Management, 16, 331-356.

Mahony, D. F., Hums, M. A., & Riemer, H. A. (2005). Bases for Determining Need: Perspectives of Intercollegiate Athletic Directors and Athletic Board Chairs. Journal of Sport Management, 19, 170-192.

Mason, D. S. (1997). Revenue Sharing and Agency Problems in Professional Team Sport: The Case of the National Football League. Journal of Sport Management, 11, 203-222.

Mason, D. S., Thiboult, L., & Misener, L. (2006). An Agency Theory Perspective on Corruption in Sport: The Case of the International Olympic Committee. Journal of Sport Management, 20, 52-73.

McNulty, T, & Pettigrew, A. (1999). Strategists on the Board. Organization Studies, 20(1), 47-74. Michie, J. (2000). The Governance and Regulation of Professional Football. The Political Quarterly, 71(2), 184-191.

Michie, J., & Oughton, C. (2005). The Corporate Governance of Professional Football Clubs in England. Corporate Governance, 13(4), 517-531.

Miller, L. E., Weiss, R. M., & MacLeod, B. V. (1988). Boards of Directors in Non-profit Organizations: Composition, Activities, and Organizational Outcome. Journal of Voluntary Action Research, 17, 81-89.

Miller-Millesen, J. L. (2003). Understanding the Behavior of Non-profit Boards of Directors: A TheoryBased Approach. Non-profit and Voluntary Sector Quarterly, 32(4), 521-547.

National Center for Non-profit Boards. (1996). A snapshot of American's non-profit boards. Washington DC: National Center for Non-profit Boards.

Olson, D. E. (2000). Agency Theory in the Not-for-Profit Sector: Its Role at Independent Colleges. Nonprofit and Voluntary Sector Quarterly, 29(2), 280-296.

Oster, S. M. (1995). Strategic management for non-profit organisations: theory and cases. New York: Oxford University Press.

Pearce, J. (1983). The Relationship of Internal versus External Orientations to Financial Measures of Strategic Performance. Strategic Management Journal, 4(4), 297.

Pfeffer, J. (1982). Organizations and organization theory. Boston: Pitman.

Pfeffer, J., & Saloncik, G. R. (1978). The external control of organizations: a resource dependence perspective. New York: Harper & Row.

Pointer, D. D., & Orlikoff, J. E. (2002). The highperformance board: principles of non-profit organization governance. San Francisco: Jossey-Bass.

Provan, K. G. (1980). Board power and organisational effectiveness among human service agencies. Academy of Management Journal, 23(2), 221.

Rhoades, D. L., Rechner, P L., & Sundaramurthy, C. (2000). Board Composition And Financial Performance: A Meta-Analysis Of The Influence Of Outside Directors. Journal of Managerial Issues, 12(1), 76.

Shilbury, D. (2001). Examining board member roles, functions and influence: a study of Victorian sporting organisations. International Journal of Sport Management, 2, 253-281.

Slack, T, & Parent, M. M. (2006). Understanding Sport Organizations: The Application of Organization Theory. IL: Human Kinetics.

Smith, A., & Stewart, B. (1999). Sports Management: A Guide to Professional Practice. St Leonards, N.S.W.: Allen & Unwin.

Stevens, S. (2006). The Canadian Hockey Association Merger and the Emergence of the Amateur Sport Enterprise. Journal of Sport Management 20, 74-100.

Stone, M. M., Bigelow, B., & Crittenden, W. (1999). Research on strategic management in nonprofit organizations: Synthesis, analysis, and future directions. Administration & Society, 31(3), 378.

Tan, H. H. (2001). Sun Tzu's The Art of War. Available at: www.geocities.com/wangawanga7/aow.htm. Access: 3rd, August, 2006.

UK Sport. (2004). Good governance guide for national governing bodies. London: UK Sport. Unterman, I., & Davis, R. H. (1982). The strategy gap in not-for-profits. Harvard Business Review, 60(3), 30.

Yermack, D. (1996). Higher market valuation of companies with a small board of directors. Journal of Financial Economics, 40(2), 185-211.

Zahro, S. A., & Pearce , J. A. (1989). Boards of Directors and Corporate Financial Performance: A Review and Integrative Model. Journal of Management, 15(2), 291.

CHIEN MU YEH
School of Leisure, Sport and Tourism Faculty of Business University of Technology, Sydney
Email: chienmu.yeh@uts.edu.au Phone: 61-412874724
29 O'Connor Street, Chippendale, NSW 2008, Sydney, Australia

TRACY TAYLOR
School of Leisure, Sport and Tourism Faculty of Business University of Technology, Sydney
Email: tracy.taylor@uts.edu.au Phone: 61-2-95143664
PO Box 123 Broadway, NSW 2007, Sydney, Australia

 ______________________________________________________________________________

 

Title	Issues of governance in sport organisations: a question of board size, structure and roles.
Author	Yeh, Chien Mu, Taylor, Tracy
Source	World leisure journal
Publisher	World Leisure Association
Vol (iss)	50(1)
Pages	p33-45
SIRC ID#	S-1075393

 

This material has been copied under license from the Publisher. Any resale for profit or further copying is strictly prohibited.

Contact us | Read our Policies | Terms and Conditions | Copyright © SIRC