Compliance Isn’t Governance: The Australian Sport’s Governance Problem
When Policy Isn’t Enough
Several Australian organisations, corporate and sporting alike, have spent this year cleaning up after crises they should have caught earlier. Each scandal shares the same thread: policy alone couldn’t make the right judgement. That takes people with the requisite skill, diversity and experience.
Take KPMG. The firm has been barred from Commonwealth work, has lost its CEO and head of audit, and shed hundreds of jobs after dismissing a whistleblower’s complaint as unsubstantiated for eighteen months.
The same issue has surfaced in sport. Codes of conduct and integrity policies exist everywhere in Australian sport. What is missing is the judgement to enforce them. Five Sydney Swans players were stood down this month over breaches of club standards. While Victorian Police investigate an alleged sexual assault in relation to the same incident, the fallout has re-surfaced questions about the AFL’s culture.
This followed the AFL fining Geelong’s $140,000 over a secret concussion waiver in Jake Kolodjashnij’s contract. This sat undisclosed to the AFL and its Players’ Association for two years, implicating Geelong’s then president and now the AFL’s own chairman, who signed off on the arrangement.
Three organisations, two codes but one pattern. Despite policies and directors, nobody heard the problem, or acted on it, until it became a crisis. Sport continues to mistake this for a compliance failure, rather than a governance failure.
Policy Was Never the Problem
None of these organisations were short on policy. KPMG has an ethics process, a Whistleblowing Policy and had engaged an external law firm to review the original investigation. Even then, the firm missed its own failure. Rather, it was because its internal investigations were conducted without the “necessary rigour required”. KPMG also admitted its management of the whistleblower and its subsequent leadership response fell short.
The Swans were no different. Both the club and the AFL had behavioural frameworks in place, chief among them the AFL’s Respect and Responsibility Policy and its code-of-conduct standards. Critics have called on the AFL to adopt the NRL’s no-fault stand down policy, which automatically removes players from competition once they’re charged with a serious offence. Whilst that recommendation may have merit, the cause of the issue is cultural. Yet the AFL’s CEO, Andrew Dillon, has denied the league has a cultural problem, conceding only “we can do things better”. Naming a problem is the first step to fixing it; the AFL is yet to take that step.
Geelong, too, had a framework in place. Kolodjashnij's concussion history had already been assessed and cleared through the AFL's own independent concussion panel, and any variation to his contract was required to be lodged with the AFL and the AFLPA. None of that stopped the club's president at the time, now the AFL's own chairman Craig Drummond, from signing off on a side letter shifting legal responsibility for future brain trauma onto the player. The issue surfaced only after a newspaper report, not through the club’s or league’s oversight. Drummond has since apologised, conceding the club went too far.
The Law Sets a Floor, Not a Standard
For most Australian sporting organisation, the guiding framework isn’t the Corporations Act’s floor of good faith and reasonable care nor is it the ASX’s Corporate Governance Principles. It is the Australian Sports Commission’s Sport Governance Standards. These Standards cover board skills, independence, diversity and risk oversight, and they’re tied directly to Commonwealth funding. For a nationally funded sport, falling short against these standards has real consequences, such as reduced or withheld participation and high-performance funding that many sports can't easily absorb.
However, that leverage only exists where Commonwealth funding does, and compliance with the Standards is self-assessed. Each year, a board scores its own organisation against each standard, ranging from ‘not in place’ to ‘optimised’. The process can confirm a diversity policy is documented and a conflict-of-interest register exists. It says nothing about whether the board reaches for either when a hard decision actually arrives. An organisation can score ‘optimised’ across the board and still carry the exact gap that produced the Geelong and Swans examples above: the difference between having governance documentation and having a board that actually exercises real, independent judgment when it counts.
The People in the Room Matter More Than the Policy
Most sporting organisations do not fall short on policy. Instead, these organisations consistently lacked a board and more broadly a workforce, positioned to act on a concern before it reached crisis point. The pattern is the same each time: concern, ignored or minimised, normalised, crisis, investigation and reform. Always after the fact. The alternative sequence isn't more paperwork. It's concern, heard, challenged, addressed. Crisis avoided.
The difference between those two outcomes isn't written down anywhere. It comes down to who sits in the room: whether directors have the independence to challenge management's version of events, and expertise broad enough between them to recognise an early warning when they see one, rather than the same professional background sitting in eight different chairs.
Research into Victoria's 40% gender quota on sporting boards backs this up: a critical mass of diverse directors was linked to boards that were more collaborative, risk-aware and stakeholder-oriented, not simply more representative.
Good governance in the end isn't a document. It's people with the skill, diversity and independence to hear what an organisation would rather not tell itself, backed by policies that support them when they act on it. Get the people right, and the paperwork finally does its job.