As most readers know, we are working with a great many NSOs and MSOs on transition to the new Canada Not-for-profit Corporations Act. Recently, we have discovered that not all sport organizations are up to date on their filing of bylaws with Industry Canada. In fact, to tell you the truth, a majority of the organizations we are working with are NOT up to date. This is creating some unexpected havoc with the process of doing the transition in two steps, which is necessary for those organizations that have many different classes of members and/or many hundreds (or thousands) of non-voting members.

As background, bylaws created under the Canada Corporations Act must be reviewed and approved by Industry Canada before they take effect. This is also true with any amendments to bylaws. After the members approve amendments, they are to be sent to Industry Canada who reviews them, and if they pass muster with the Act and the government’s various corporation policies, then Industry Canada writes back a “Letter of Ministerial Approval”. It is only when this letter is received that the amended bylaws come into force. Of course this is a very inefficient system, and efficiency is one of the goals of the new legislation, so once your organization has transitioned to the Canada Not-for-profit Corporations Act it will no longer be necessary to get Industry Canada approval (thank goodness!).

But here is the problem we have discovered – many organizations have NOT filed bylaw amendments with Industry Canada. Thus, the bylaws which your organization relies upon may not be the bylaws that are legally in force. This point has been brought home in several cases, as organizations have filed amendments in 2012 0r 2013 (which would ordinarily meet with Industry Canada approval) only to discover that the remainder of the bylaws have deficiencies. Thus, Ministerial Approval cannot be obtained unless the all the deficiencies are corrected which requires that you return to your membership for more amendments. Logistically, this might be impossible.

The result of this situation, which we have encountered numerous times already, is that an organization’s pathway to compliance with the new Act becomes considerably more complicated. We have even encountered one NSOs that has no bylaws on file at all! A dark cloud perhaps, but one with a silver lining because the organization may be able to transition from a ‘clean slate’, which could be easier than transitioning from existing bylaws. Possibly a good problem to have ….

In recent months we have added a ‘due diligence’ step in our work with NSOs and MSOs, which is to confirm with Industry Canada exactly what is in their files and has been approved. The Clerks and Examiners at Industry Canada have been understanding and helpful in this step. Depending on what Industry Canada comes back with, your organization’s transition strategy may need to be adjusted.

If you would like to learn more about this little problem, or if you would like our help in retrieving or reviewing what you have “on the record” (versus what you think you have), please contact any one of us. And, our kudos to those NSOs and MSOs who have been doing a good job with their bylaws, keeping them current with Industry Canada. We know who you are, and you do too – congratulations!

Our new handbook, Values-in-Action: Igniting Passion and Purpose in Sport Organizations, was published just over five months ago. To date we have sold over 300 copies to sport executives from all across Canada – ranging from volunteers at small local clubs to executive directors at national organizations – and we have started to receive some excellent feedback.

Jeff Partrick, Director Coaching and Skating Programs, Skate Canada writes:

“This book is a great tool that will redefine how you approach your business. The process of managing by values creates a renewed sense of purpose and conviction and is the litmus test that helps guide one’s decision making.”

Purpose and conviction are necessary elements that are sometimes lacking in today’s sport organization. Values can strengthen an organization’s raison d’etre and help guide, manage, and crystallize any major change initiatives. Activating your values gives your organization purpose and gives the organization’s employees and stakeholders a shared goal.

Karen O’Neill, Chief Executive Officer, Field Hockey Canada writes:

“[The book] is a perfect blend of current up to date information and pragmatic examples of how this work can be translated behaviorally on a day-to-day basis.  I have read the book a few times, and I keep it close by as a reminder on a daily basis of the things that make the most difference and impact – leading from a values based perspective. This book has become a talisman for me.”

We feel that the handbook’s new information (based directly on the recent academic literature I reviewed for my Master’s thesis in 2011) combined with the practical examples are two of the most compelling reasons for sport leaders to read the handbook. Combining theory with practice is high-reward approach for sport leaders looking to engage with recent developments in the field and apply those developments to their organizations.

Caroline Assalian, Chief Sport Officer, Canadian Olympic Committee writes:

“As a longtime sport leader I recognize the need for resources that will help sport administrators navigate the complexities and management challenges that they face on a daily basis. This handbook is a great tool that is filled with practical examples and tips from other sport leaders while providing leading edge advice on how to integrate one’s corporate values more intentionally. It’s definitely worth the read!”

One of the goals of writing this handbook was to provide sport leaders with a resource that they could return to, review, and re-read to underscore the importance of the role of values in an organization. Eleven appendices are included – helpful tools that describe sample terms of reference for a values committee, a sample interview process for a values uncovering initiative, and a critical path to build support for a values project. We have also provided sample values statements, a sample evaluation framework, and a sample personal values self-identification exercise. It’s all here!

Greg Mathieu, Chief Executive Officer, Cycling CANADA Cyclisme writes:

“As sport leaders we have volumes of information being sent our way to digest.  Seldom is this information concise, detailed and directly applicable to our needs.  The Values-In-Action handbook is an exception that any sport leader – staff or volunteer – would benefit greatly from reading”

We understand how busy sport leaders are – so we intentionally wrote the handbook to be easy to access, clear and concise, and able to be read in a single sitting.  In fact we recommend that you read the book in a single sitting – digest it, think about it, mull it over – and then read it again with an eye to applying its concepts and themes to your organization. We expect that your second reading will be filled with ‘aha’ moments!

Ron Smale, President, The Ontario Soccer Association writes:

“I had a copy of the book given to me as a gift from a very good friend.  It is excellent.  An excellent read!”

Some organizations chose to give a copy to each of their Board members over the holidays. We agree that the handbook makes a great gift!

We are eager to hear how our handbook is being received and how values are being intentionally used within your organization. If you have not yet read the handbook we hope you will purchase a copy and see for yourself what everyone is talking about!

Carleton business professor Linda Druxbury researches and writes about the pending shortage of a skilled workforce. She puts it quite clearly … with baby boomers set to retire large numbers over the next decade, organizations that are not prepared for the leadership gap, are doomed to fail. So imagine my interest in a slew of recent articles that urged the private sector to do more to solve skills crisis.

From my perspective, I’m  not sure why government and business leaders are only urging the private sector to solve the skills crisis … I suggest that the social profit sector is in dire need of a makeover as well. And if I think about the sport sector, my warning system creeps toward the red.

Perrin Beatty, the president and CEO of the Canadian Chamber of Commerce believes that workplace training is a key part of an employer’s responsibility. Yet, not surprisingly, Canadian firms continually under invest when it comes to helping workers upgrade their skills. For instance, in 2005-06, they spent less than two per cent of their payroll on training. Beatty argues that “If people lack the basic skills they need to do the job, they’re not going to be competitive.” And in this knowledge economy, companies that invest in upgrading the skills of their employees will over time yield significant dividends. The Conference Board of Canada agrees, stating in a 2005 report that “The human resource capacity of any workplace, when properly managed, maintained and utilized, is often one of the biggest and competitive advantages an employer has.”

From a sport perspective, the national Risk Management Project (which has been coordinated by the Sport Law & Strategy Group on behalf of the True Sport Secretariat for the past seven years) has identified a number of high level risks that are shared across NSOs. Not surprisingly, the lack of capacity of staff and volunteers continuously tops the list. Smart risk management means being able to not only identify and rate a risk, but also being able to determine strategies to retain, reduce, transfer or avoid these risks.

Retain the risk

If we were to retain the risk of not investing in our workplace capacity, I would argue that we would not be fulfilling our public duty as articulated in each of the NSOs’ mission statements or in the policy objectives outlines in the renewed Canadian Sport Policy. Yet, as the University of Ottawa professor Stephen Stuart suggests in his response to the 2010 and Beyond Panel “…Canada’s high performance sport systems are not provided with an appropriate framework for dynamic organizational capacity development, designed to raise overall administrative skill and ability levels to consistently be the best in the world, the strong possibility exists that when Canadian high performance athletes compete on international and world stages their preparations will not be as complete as they could and should be.” (emphasis added). Retaining the risk is clearly not a preferred option.

Transfer the risk

What options exist when we consider transferring the risk? We might look at academic institutions and urge them to better prepare the new crop of leaders. The problem is, not many sport management or sport administration graduates are clamoring to work in our sector. When I was doing my Master’s degree in Sport Management at Brock University a few years ago, I was amazed that none of my fellow colleagues were interested in a career in amateur sport. Most wanted to become sport lawyers, agents or marketers. The idea of working in amateur sport never really crossed their mind. To my knowledge, Brock University’s Centre for Sport Capacity is the only such institution to research capacity issues in sport. Irony of all ironies … it too lacks capacity – both financial and human resources – to fulfill its mandate. Then we have the consultations and round table that fed into the Sport Policy renewal process. Lack of capacity also topped the list and yet NSOs received recent cuts to their administration budgets. “Do more with less” will soon become “Do less with less” unless we properly address and manage this risk.

Avoid the risk

Unless we do something to reduce the likelihood of this risk coming to pass, I’m not sure we can avoid the many associated risks that are directly related to a shortage of skilled employees and volunteers – our future leaders. Reality bites. Consider that by 2016, almost 350,000 people in Ontario won’t qualify for available jobs. That number is expected to rise to 700,000 in the ensuing years. At the same time, almost 1.5 million jobs will be unfilled in Ontario due to the shortage of appropriately trained and educated workers. Risks like not being able to recruit and retain highly qualified people; risks related to poor succession planning and knowledge transfer; risks related to unethical and ineffective decision-making; risks related to reduced revenue and brand mismanagement; risks related to poor athletic performance; and the list goes on.

Reduce the risk

This is where I think we have the greatest opportunities to make a significant difference. Over the past several years, my partners and I at the Sport Law & Strategy Group have worked in collaboration with sport leaders at the national, provincial and community levels to address the gap in knowledge in a variety of areas, but namely  law, governance, planning and communications. What we have tried to do over the past two decades is inject a level of critical thinking and analysis that is too often found wanting in our sector. The tyranny of the immediate always seems to win out … it’s hard to think about the strategic and the sustainable when there are so many fires to put out, my clients often share with me during the risk management workshops. So what are some of the strategies that we would advocate for? Here’s our top five? list of things the sport sector must do in order to reduce the hazards associated with this risk:

Strategy 1: Develop a workforce strategy for the sport sector to identify our gaps in knowledge, training opportunity, compensation, and education. While I commend the COC for its work on a review of the sport sector’s employee compensation, to my knowledge we are sadly lacking when it comes to strategically mapping out the kind of skills required to manage and administer a 21^st century sport organization.

Strategy 2: Make sport jobs inviting to under-represented groups such as aboriginals, women, and person with disabilities. Finding ways for under-represented groups to work in the sport sector may leverage hidden opportunities related to membership, branding, revenue, and partnerships.

Strategy 3: Look for ways to train current employees in sport management skills. For instance, we are in the process of creating a certificate in sport management for sport leaders that would be issued by a university and valued by the sector. People want an opportunity to learn and grow on the job and research tells us that good people will stick around if they feel valued, are recognized for their work, are fairly compensated, and have opportunities to continuously learn. In addition, provide sport organizations with incentives to address the literacy gap. We have shifted to a knowledge economy and with almost half of the province in Ontario’s adult population lacking the literacy and essential skills needed to cope with the demands of a knowledge economy, working with our education sectors to encourage sport administrators to continue post secondary training, is a must in order for our sector to sustain itself.

Strategy 4: Promote a career in amateur sport. From my experience, most people I know of don’t know or appreciate the significance of the sport industry to Canadian GDP. They don’t know what they don’t know. We have blogged before about what sport can do for the wealth and welfare of Canadians so I won’t itemize the long list of sport’s contributions. What I will say is that we, as a sector, have a collective responsibility to purposefully recruit and retain not only the world’s best coaches and athletes but also, the world’s best administrators and volunteers. Strategy 3 should help address current gaps with today’s sport leader. This strategy is about ensuring that our sport management/administration schools are teaching the essential skills to run today’s sport organization – whether it be a local soccer club or a national federation.

Strategy 5: Director training. With other non-profits, there is a push to encourage director training through one of the many Directors’ Colleges. This is where volunteer directors go to become great board leaders. While it might be too big and too bold to imagine a future where every director on a NSO Board has gone through a formalized training program before he or she is considered as a possible candidate, I would hope that over the next decade, we could create an accessible program that would give directors the knowledge they need to meet their fiduciary, strategic and generative responsibilities.

The NFP Act came into law in October 2011, with a 3-year window for corporations to become compliant (by October 2014). That window is now almost half-closed, meaning that there are only about 18 full months remaining for sport organizations to complete the transition to the new legislation.

Half-way through this transition period, I want to reflect on four emerging issues. In November 2012 I wrote a post about some of the mechanics that sport organizations should include in their transition planning and timing. This post is about some new challenges that are more subtle, but that if not considered and attended to, could have a big impact on your organization’s future governance structure and practices.

Firstly,  nomination systems for board succession will be hugely important. Because the Act requires that all directors be elected, organizations may be challenged to find directors. In the past where directors were ex-officio, or were appointed by entities within the organization or outside it, a board of directors simply created itself without a lot of thought and planning. This will not be the case going forward. Organizations will have to seek out, recruit and nominate qualified people. And keep in mind, every other sport organization will be seeking out and recruiting also – possibly from the same small pool of people (the sport community is not very large, after all). We may all be competing against each other for qualified, committed, skilled board leaders for our sport organizations.

This places an onus on sport organizations to design and implement robust nomination procedures – including scanning your board for needed skills, creating position descriptions for the positions you wish to fill, delegating to a capable nominating committee the task of seeking out nominees, determining the minimum qualifications for nominees, communicating and advertising leadership opportunities through national media, vetting nominees to determine who is most appropriate, and creating the procedures and timelines for your election process. Nominating used to be an afterthought, done a few months or a few weeks out from an annual general meeting: now, it will a year-round process and will require focused thought.

I cannot overemphasize the importance of placing a high priority on planning succession within your board.

Secondly, if you are like most NSOs you are streamlining and simplifying the definition of membership and moving away from individual participants having status as members in your organization. Instead, they gain recognition in a different way, as a ‘registrant’ or ‘registered participant’. This is a wise course of action but alone is not sufficient. If individuals are not members, then a sport organization does not have legal authority or jurisdiction over them through their bylaws. Jurisdiction is critical – without it, a sport organization does not have control over participant conduct and does not have the legal ‘monopoly’ that is the backbone of the amateur/commercial sport system. Jurisdiction must be established in other ways, such as through policies, rules or contracts. This can be easily done, but is also easily overlooked.

Rowing Canada Aviron, upon eliminating individuals as a class of member, passed a resolution that “wherever in RCA’s policies there is a reference to ‘members, which under the former Constitution included non-voting members, that this will be taken to include ‘Registered Participants’ until such time as the RCA policies are revised to conform with the amended Constitution”. A very easy fix indeed! But potentially fatal if not done.

Thirdly, as organizations move towards elected boards and typically smaller boards, many of them are losing sight of athlete representation. Because directors must be elected, the usual practice of having national team athletes put forward their own representative to serve on the board will no longer work. An alternative method must be designed, and this requires some thought and some effort. Sport Canada, as a funding agency, requires that each funded NSO have “a formal policy on athlete centeredness and can demonstrate the direct involvement of high performance athletes in decision-making”. Sport Canada acknowledges that giving athletes substantive opportunities to be involved in decisions which affect them can be achieved in a number of ways.

My observation working with about 40 organization on their transition plan is that athletes are not engaged in these discussions about transition and governance reform. Decisions about future governance within sport organizations are being made at a very high level, and the impact of these decisions will go very deep. Athlete leaders, and AthletesCAN, should take note.

Lastly, the natural evolution towards smaller, competency-based, policy-governing boards gives rise to the discussion about …. CARVER. The Carver model of governance dates from 1990 and governance ‘guru’ John Carver. In simplest terms, the model states that the role of the Board is to determine organizational purposes (‘ends’) and to leave all other organizational matters (‘means’) in the hands of staff. The board exercises its oversight and fiduciary role by setting limits as to what staff can do to carry out means. The Board delegates all means to a single staff person (the CEO) and holds that person to account.

Several organizations undergoing transition have wanted to explore this model for their future structure. Theoretically it holds appeal as it is simple, elegant and unmessy. But it makes me very uncomfortable. The president of one NSO (who shares my discomfort) stated recently “if you are being a recruited to a board and the board follows the Carver model of governance, run for the hills!”. I am not convinced that the Carver model is conducive to directors fulfilling their statutory, fiduciary duties, which is why ‘running for the hills’ might be a wise response. While there are elements of Carver governance that are very helpful, the model in its entirety is not the solution.

More importantly, I don’t think the Carver model is good for sport. A tiny few NSOs in Canada are governed this way but even those are not pure Carver organizations. The predominance of volunteers and vounteerism in the leadership and delivery of sport in Canada (as a sector, we rely more on volunteers than any other sector) does not support the Carver model, in my view. I am sure there are some people who would challenge me on this – its a good debate!!

Thanks for listening. Feel free to contact me, or others in the Sport Law & Strategy Group, if you want to discuss any aspect of your transition to the NFP Act.  rmc@sportlaw.ca

Melanie Herman, of the Nonprofit Risk Manager Center, recently published her RISK eNewsletter and I wanted to share a great little excerpt. I hope you find it as helpful as I did.  In essence, it’s a reminder to not allow your discomfort with uncertainty to dampen your commitment to engage the Board in a discussion on the crucial strategic risks facing your NSO. If you’re working on your next Board agenda, consider the questions below.

Invite the Board to discuss these questions as a way to engage in a high level conversation about risk-taking and risk management in your context.

1.   Risk-Taking: What big risks are worth embracing in 2013 to advance our mission?

2.   Risk Landscape: What mission-related risks are starting to emerge on our horizon? What additional information do we require to understand and act?

3.   Lemons from Lemonade: What seeds of opportunity exist in the risks we fear the most? (e.g., the threat of funding cutbacks could compel us to finally move ahead with a new business model)

4.   Progressive Lens: Are we using our collective, progressive lenses to reflect on our past, appreciate our present, and anticipate our future, or only seeing “risk” through a single lens?

5.   Risk Oversight: Is this board contributing to a shared understanding of the organization’s top risks?

6.   Lessons Learned: During the past year what important lessons did we learn from our “crowning achievement” and from our biggest disappointment?

7.   Risk Resources: Have we made an appropriate commitment in terms of personnel time and financial resources to understand the risks we face and make adjustments as needed?

As always, if you need to discuss any of the above, please drop me a line – dbl@sportlaw.ca

At the Sport Law & Strategy Group, we regularly receive requests from sport organizations asking for assistance writing policies. These are the policies, procedures, and rules that the organization’s sport leaders believe are necessary to govern the organization and its members. Over time, most National Sport Organizations (NSOs) and Provincial Sport Organizations (PSOs), and even some local/regional sport organizations have built a working policy manual that is used and regularly reviewed by the organization.

Why does my sport organization need policies?

Most organizations will want the autonomy and freedom to handle their own issues internally. This means that organizations must build and follow their own organization-specific policies. There are other good reasons for sport organizations to have their own policies including:

• The policy is required by law
• Members are frustrated by a lack of processes within the organization
• The organization’s leadership frequently changes
• A recurring issue requires a standard solution
• The policy provides a path to manage an issue from beginning to end

Organizations that do not have even the most basic and necessary policies (like a Code of Conduct or a Discipline and Complaints Policy) risk alienating members and raising questions about the both the organization’s governance and the credibility and transparency of its Board of Directors. Also, if a member has a complaint that cannot be addressed by a policy, the member may take the organization to court to resolve the issue – an expensive process for all involved.

Both large and small sport organizations have all kinds of different policies.

Squash Canada, an NSO, has policies for Privacy, Appeals, In-Event Appeals, Discipline and Complaints, Code of Conduct and Ethics, Gender Equity and Access, Eye Guards, Doping, Official Languages, Conflict of Interest, and Athlete Representative.

Manitoba Ringette, a PSO, has a 79-page Operating Manual that includes policies for Conflict of Interest, Conflict Resolution, Code of Conduct, Harassment, Discipline, Appeals, Leagues, Privacy, and Bingo.

The Peel Halton Soccer Association, a regional sport organization, has posted policies on its website for Privacy, Membership Consent, and ‘Playing Out’. The PHSA also has a policy statement on Harassment which reads:“The Peel Halton Soccer Association, as a Member of the Ontario Soccer Association, is committed to adhering to the OSA’s published Harassment Policy” and the OSA’s Harassment Policy is provided.

The Canmore Nordic Ski Club, a local sport organization, has a 4-page policy package that includes: Member Responsibilities, Code of Conduct, Enforcement Policy, Photo Release, and a Youth Athletes Code of Conduct specifically for youth.

Multi-Sport Organizations (MSOs) like sport councils, funders, officials organizations, sport centres, or advocacy groups will also have policies and they will likely be similar, especially if these organizations have members.

So many policies!  And there are yet more policies that these organizations do not have (likely by choice) or that they have included elsewhere in their governing documents instead of as stand-alone policies.

How can my organization determine which policies we require? 

There are a few questions a sport organization’s leaders can ask:

1.  What is the organization’s relationship with its sport’s larger organization(s)?
2.  Does the organization have members?
3.  Are the members individuals?Are any policies required by law?
4.  What policies are recommended for risk management purposes?
5.  Are there any recurring instances or issues in the organization that could best be addressed by a policy?
6.  Can any policies be replaced by a policy statement referring to another organization’s policies?

One question an organization should not be asking itself is: “What policies do other organizations have?”  Even other PSOs in the same sport may have different policies that are required by law or by issues specific to their organization. What is necessary and works well in one province or for one sport group may not even be needed or used by other organizations.

In the role of sport leader, let’s answer each of those six questions and end each answer with recommended and optional policies for larger (NSOs and large PSOs) and smaller (small PSOs and local/regional organizations) sport organizations.

1. Does the organization have members?  Are the members individuals?

This is probably the biggest question for sport organizations because most will indeed have members. An organization with members should have policies that address membership issues. For example, if members are individuals then the organization will want to have a Code of Conduct that governs/monitors member conduct. The organization does not want a member’s negative conduct to reflect poorly on the organization. The Code of Conduct should be enforced by a Discipline and Complaints Policy.  Some organizations may have a Harassment Policy that covers similar issues but in a recent article on our website, Rachel Corbett recommends the phasing out of this specific policy. Some organization may choose to have a Dispute Resolution or Mediation Policy that takes effect before a formal complaint process to attempt to resolve member issues via a negotiation settlement. An Appeals Policy should also be part of the procedurally fair process of handling member complaints or issues.

Recommended for larger organizations: Code of Conduct, Discipline and Complaints, Appeals, Dispute Resolution (optional)

Recommended for smaller organizations: Code of Conduct, Dispute Resolution

Smaller organizations may not have the capacity to handle membership complaints or disputes on their own. A Dispute Resolution process should be undertaken, but if the process fails to reach a negotiated settlement, the organization could have a policy statement remitting the complaint, discipline, or appeal to be heard under the larger organization’s policies. For example, if Softball New Brunswick received a complaint from a member, the first step would be to attempt to resolve the dispute internally, but if that failed, Softball NB could have a policy statement sending the issue to be heard by Softball Canada under their policies. Currently, even though capacity issues may exist, many smaller organizations do not currently have this sort of relationship with the larger organization in their sport.

2.  Are any policies required by law?

Most sport organizations are incorporated, under either federal or provincial legislation, which means that the organization must abide by certain laws in order to maintain its status as a registered corporation. Directors of the Board have specific legal responsibilities, one of which is to place the organizations’ needs over the Director’s personal needs. This particular legal responsibility is often explained in a Conflict of Interest Policy.  Confidentiality is another area highlighted by the legislation. The federal government and most provincial governments also have privacy legislation governing the protection and use of personal information and, therefore, organizations should have a Privacy Policy explaining how they intend to comply with these laws. (The Sport Law & Strategy Group has created Privacy Policy compliance packages for organizations). Certain provinces may have other province-specific laws. For example, Ontario has Workplace Violence as well as Accessibility legislation, and recent case law has also created guidelines for the use of technology in the workplace – which should also be covered by a policy.

Recommended for larger organizations: Conflict of Interest, Confidentiality, Privacy, province-specific policies

Recommended for smaller organizations: Privacy, province-specific policies, Conflict of Interest (optional)

Conflict of Interest, which we have written about on our website, is nearly impossible to eliminate in amateur sport organizations and this is especially true for smaller organizations that have limited capacity. Though this may seem to be a good reason to have a Conflict of Interest Policy in the first place, it would also make such a policy extremely difficult to enforce and properly follow. There would be constant violations of the policy to the possible extent of restricting the organization’s actions. Conflict of Interest for smaller organizations may best be addressed with flexible case-by-case guidelines (such as preventing parents from evaluating their children for selection to an all-star team) rather than tight rules. We recently highlighted a practical article on the myths and realities of conflict of interest.

3.  What policies are recommended for risk management purposes?

Risk management is a huge area that some sport organizations find difficult to address. We have written extensively on this topic and are currently leading NSOs through risk management workshops (the ‘Risk Management Project’). In terms of policies, an organization should have polices that assist the organization with limiting its risk. For example, some organizations have a Sanctioning Policy that explains the standards (in terms of eligibility, participants, safety, etc.) required for any event to be given the stamp of approval and be formally sanctioned by the organization. Photo Release forms can also help the organization limit its risks by requiring members to agree to the release of their image for non-commercial purposes. Waivers or forms accepting the physical and legal risk of an activity should also be considered by an organization. For risk management purposes, it also would be prudent for organizations to have a comprehensive Screening process for its coaches, volunteers, and even Board Members. Our comprehensive Risk Management Guide for Community Sport Organizations is available for free through the 2010 Legacies Now website.

Recommended for larger organizations: Sanctioning, Photo Release, Screening

Recommended for smaller organizations: Photo Release, Screening, Assumption of Risk (optional)

Smaller organizations, particularly local/regional organizations, are likely to be the direct point of registry for members participating with the sport. The assumption of risk (plus a photo release form – so that the organization can use its members images on the organization’s website or for other non-commercial purposes) are best contained as part of a registration package. Smaller organizations likely will not be able, for capacity reasons, to have as comprehensive a Screening process as used by larger organizations. Still, smaller organizations – especially local/regional clubs – should strongly consider requiring its coaches and volunteers to acquire a police records check with vulnerable sector verification.

4. Are there any recurring instances or issues in the organization that could best be addressed by a policy?

Organizations naturally face different issues depending on the sport, location, and size of the organization; among other factors. A small Judo club in Quebec may want a Fundraising Policy that standardizes how money is raised by members. A provincial hockey association may have specific rules regarding sponsorship – necessitating a Sponsorship Policy. Athletics Canada has a number of paid staff members and they may choose to have a Human Resources Policy (with or without Employee Agreements) to help streamline the internal operations of the organization. Some organizations may take a ‘hands-on’ approach to administering events and want a written procedure for protests and appeals that happen during an event. As in the Manitoba Ringette example, there may be policies that no other organization has (such a Bingo Policy) but that make perfect sense for the specific needs of that particular organization.

Policy options for organizations: Fundraising, Sponsorship, Human Resources, Event Protest Procedure, etc.

Social media is the “recurring issue” currently facing every organization. We have written about this more exhaustively in a recent post on our website from October 2012 and we simplified the discussion in a post back in October 2011. It is important for every organization to have a strategic approach to social media; which may or may not include a Social Media Policy depending on the nature of the organization.

Recommended for larger organizations: Social Media Strategy

Recommended for smaller organizations: Social Media Strategy

5.  What is the organization’s relationship with its sport’s larger organization(s)?

Instead of having their own policies, smaller organizations may want to adopt a larger body’s policy and apply it to their own issues. For example, the Red Deer Curling Centre may have a policy statement, instead of a larger policy, that simply says “The Red Deer Curling Centre adopts and adheres to the Alberta Curling Federation’s Code of Conduct” with the intention that any conduct issues by members of the local club would be handled under the jurisdiction of the PSO’s policy. But this arrangement does not always work. This arrangement would require the local club to have a referring committee, the correct jurisdictional understanding, and a relationship that is understood and approved by the PSO.

6. Can any policies be replaced by a policy statement referring to another organization’s policies?

Most NSOs have a policy statement about drug use and doping control in which they reference the Canadian Anti-Doping Program and agree to adhere to this program as outlined by the policies and authority of the Canadian Centre for Ethics in Sport (CCES). NSOs may also have policy statements about gender equity and communication in both official languages, outlining their commitment to both of these issues. The issue of transgendered athlete participation is gaining some attention from larger sports that have transgendered athlete participation and this may soon be a legal issue rather than an optional policy.

Policy statements for larger organizations: Doping, Official Languages (optional), Gender Equity (optional), Transgendered Athlete Participation (optional)

Policy statements for smaller organizations: (Depends on the relationship with the sport’s larger organization)

Policy Approval, Policy Review and Policy Distribution

New policies enacted by the organization should be approved by the Board and any policies should undergo a regular review. The review can be annually or, more commonly, every two years. Part of the review should consist of determining if there were any recent issues that required the use of a policy. Were the any complaints from members? Privacy problems?  If so, were these issues properly addressed by the policy and can any improvements be made?

Next, are there recurring issues that require a new standard policy? If the Board is constantly receiving requests about player transfer protocol then perhaps a new policy should be created that outlines the proper process. Finally, a policy review should make sure that all the organization’s policies work together. For example, the Discipline and Complaints Policy should contain a section that reads: “Appeals of any decisions made under this Policy may be appealed using the Appeals Policy” and the Appeals Policy should similarly make connections to other policies in the section describing its scope.

Most policies can be posted on the organization’s website. Some policies do not require this treatment and can instead be used only internally. A Confidentiality Policy can be kept amongst the Board of Directors and other province-specific legal policies may not need to be posted publicly. Generally, any policy that affects members should be posted in its own section on the organization’s website along with the organization’s Constitution and By-Laws.

Conclusion

In this article we have outlined why organizations need policies, provided questions for sport leaders to ask themselves about which policies are needed, and given recommendations for policies for different sizes of sport organizations. We have also briefly touched on policy reviews and distribution.  Throughout the article we have linked to other posts on our website that describe some of the listed policies in more detail.

The Sport Law & Strategy Group has years of experience helping organizations with their policy creation, development, and review. If you have any questions about any of the policies mentioned or about any stage of this process please feel free to email us.

Kevin Lawrie – KRL@sportlaw.ca
Steve Indig – SJI@sportlaw.ca

NSOs and MSOs in Canada have less than two years to make a successful transition from the Canada Corporations Act to the Canada Not-for-profit Corporation Act. So what is the best plan for becoming compliant? There is no easy answer to this beyond a strong suggestion that organizations should start thinking about it now.

We all know that the most significant governance changes made necessary by the new Act relate to classes of membership and the structure of the board of directors. There are also many other changes, less substantive in nature, that will be required to comply.

Here are some thoughts about planning and timing your transition:

– Examine how many AGMs you have between now and October 17, 2014. For most organizations it will be two. Some organizations are set up to have two member meetings a year which in effect doubles their opportunities to have members vote on the required changes. Start to build your plan around these member meetings, because your members have to vote on the governance changes you are making.

– Do you have multiple classes of members and many non-voting members? If so, it is recommended that your first step of transition is to streamline member classes down to just one or a few categories of voting members, and to eliminate non-voting classes of members. To keep tabs on all those athletes, coaches, officials and administrators in your sport, who may currently be in a class of non-voting member called “Associate”, you should redefine them to be “registered participants” but not members. These changes to member classes in your bylaws should be done under the Canada Corporations Act, and likely you should be looking to make them at the earliest opportunity, or your next AGM.

– Do you have a representative, constituency-based board structure made up of many ex-officio directors and appointed directors? If so, this will have to change. The change can be done all at one time, or can be phased in over a year or more. The choice is yours, but whatever the choice, these changes can only be made through member approval of bylaw changes. So you have to plan these changes around member meetings.

– Is it possible for your organization to call a special meeting of members at any time? Do your current bylaws allow you to make bylaw changes at a special meeting? Can this meeting be done by telephone? If your current voting members are relatively few in number, and your bylaws are flexible in allowing you to make changes at any meeting of members, then a special meeting via telephone is easy and inexpensive to do. Your ability to do this will help immensely in your transition efforts and timeline, as it means you are not bound to a single AGM each year.

– Do you have members who are highly engaged in governance? Or are they more hands-off? Do you have provincial/territorial associations who are mistrustful of each other and of your national office? Do you have other stakeholders who need to be consulted? The extent of member consultation required varies from organization to organization. Some NSOs have been consulting their members for 18 months already, while others have not yet started.

– Are your objects of incorporation up to date? Objects are set out in your Letters Patent (or Supplementary Letters Patent, if they have been changed from their original at some point). These will need to be reviewed, especially as there have been changes to the Income Tax Act that affect those NSOs who have charitable status. Ultimately, Canada Revenue Agency will have to improve your purposes and other matters set out in your transition documents.

– Full transition will require submission of two documents – Articles of Continuance/Transition and Bylaws (Bylaws can be submitted up to 12 months after the Articles but for the purposes of governing your organization it is suggested that they be approved and submitted at the same time). You will possibly need some expert guidance to prepare these documents correctly.

– Does your organization want to use this opportunity to make other changes? As we like to say, ‘while the patient is on the table’ it might be an opportune time to diagnose other ailments. Are there new governance practices you could adopt? Should you examine your committees and their mandates? Should you redefine your officers? Should your Executive Director’s mandate and authority be reviewed? Do you want to change your legal name?

As you can see, there are lots of things to consider when making your plan. We suggest you start developing your timeline now, by working backwards from October 2014, figuring out key points for decisions, and including phases to consult members about ideal member classes, voting rights, and board representation. We also suggest you leave a little ‘cushion’ of time, in the event a vote doesn’t go as planned. In other words, make a plan, but also make a back-up plan.

Ken Davies, President of Alberta Biathlon and Chair of Biathlon Canada, recently shared with me a simple model for board leadership that he uses in the private sector. I immediately thought it could have application in sport, especially as some National Sport Organizations move to more policy-oriented, competency-based boards as part of their transition under the new not-for-profit act.

Ken suggested that corporate boards typically meet four times per year. This is not an uncommon model with sport organizations also. Among many of the boards that he advises as a management consultant, these four meetings each have a distinct topic focus. The four topics are: strategy, operations, risk and budget. The order of the first three is not that important but the budget meeting is usually the last one before the new financial year begins.

The focus on a main topic for the board meeting does not mean that some other necessary business is not conducted at the meeting. The power of this approach is that it encourages full and rich discussion by the board. It is understood by all staff and directors what the meeting focus will be, and all participants are given information well in advance so that they can prepare for the meeting.

In my view this approach is brilliant because it is so simple. It keeps a board clear about its oversight role and discourages the board from meddling in day-to-day details that are outside its purview. Four board meetings a year, each with a singular focus on strategy, operations, risk and budget. I think this is worth trying – any takers??

At the Sport Law & Strategy Group we have been working with almost 40 national level sport organizations on their transition from the Canada Corporations Act to the Canada Not-for-Profit Corporations Act. We are learning lots in the process but wanted, at this time, to share a critical but not well-understood aspect of the transition process – namely, that if your organization has a complicated membership structure and many non-voting members, then you need to proceed in two steps.

We have alluded to this before but will make it plain here in this post. A majority of NSOs have multiple classes of members including classes that have many individual members who do not have voting rights. These are typically in a category called  ”Associates” which represents all the many individual coaches, athletes, officials, administrators and other volunteers who are non-voting members of the NSO by virtue of being registered members of a PTSO. The effect is that many NSOs have many thousands of individual, non-voting members. Some even have hundreds of thousands.

Here is where it gets complicated. Section 212 of the NFP Act requires that the documents necessary to make a transition from the Canada Corporations Act to the Canada Not-for-profit Corporations Act must be approved by two-thirds of the members entitled to vote. Section 197 and Section 199 of the Act speak to ‘fundamental changes’ and make it clear that those fundamental changes that involve changes to membership classes, rights or conditions must be approved by a two-thirds vote of each class of member (in what is called a ‘separate class vote’), including those members who do not have voting rights in the organization’s current bylaws.

The advice widely given to sport organizations is that to avoid future problems under the NFP Act, they should streamline their member classes and eliminate non-voting classes of members entirely. This is the course of action being pursued by most organizations who are preparing for transition to the NFP Act. It is a wise course for sure, and proactively addresses the risk that some fundamental change desired in the future (which we cannot anticipate in the present) might be obstructed because an organization was unable to get an affirmative two-thirds vote from all classes of members, including those that normally would not have the right to vote.

This is why your transition must be done in two steps. The first step is to streamline your member classes and eliminate the vast numbers of non-voting members, and to do so under the Canada Corporations Act. When that is done, the second step is to have your ‘newly-defined’ classes of members approve your Articles of Continuance and new Bylaws. Transition will then be complete.

What we have observed, however, is that some organizations are trying to combine the steps into a single vote to save time. In other words, they are asking voting members at an annual general meeting to approve Articles of Continuance and Bylaws that will radically alter membership classes and member rights within the organization, and cancel entire classes of non-voting membership, while disregarding the fact that to do so, they must ask ALL their members to vote. Failure to put the transition documents to a separate class vote of all members, voting and non-voting, will render the approval and your transition invalid.

It is also worth mentioning that in most cases, even if the organization wanted to put the vote to all non-voting members, it would be unable to do so because the organization lacks the means  to communicate directly with these individuals to give them notice and a means by which to vote. It would be a virtual impossibility for most NSOs.

This requirement to transition in two steps is well stated by Theresa Man, a lawyer with Carters (Canada’s leading charity law firm) who is an expert on the NFP Act and has written extensively on it. In a presentation to the Ontario Bar Association in 2011, she wrote about changing the rights of membership classes, stating: “…if these changes are to be done by way of the new CNCA by-laws as part of the continuance process, the corporations will be required to hold a separate class vote (including non-member voting classes) under Section 212 of the CNCA in order to pass the articles and new by-laws, even if their current bylaws do not require separate class votes” (page 24). She goes on to suggest: “… corporations may want to start the by-law review process early, leaving enough time to amend their current CCA by-laws to implement these changes in order to avoid the need to hold a separate class vote, before preparing by-laws under the CNCA”. (page 24). (Note that Ms. Man uses the term CNCA in her writings, and not the term NFP Act).

Ms. Man gives the same advice in another article written for Osgoode Hall Law School’s Professional Development CLE program. She states: “If the corporation has more than one class of members,  subsection 212(4) of the CNCA provides that changes to the letters patent, supplementary letters patent or by-laws as part of the continuance process that affects the rights of a class or group of members in the nature referred to in subsection 199(1) of the CNCA must be approved by separate class vote of each class of members (regardless of whether they have the right to vote)” (page 60).

This same advice is given by the Canadian Olympic Committee in its guidance memo to National Sport Federations dated October 2, 2012 (see middle of page 6). We have given this same advice to organizations, and even Industry Canada’s Transition Guide alludes to this at Step 4 in stating “Despite the voting rules in the existing by-laws, the NFP Act requires that the articles of continuance be approved by two-thirds of the votes cast by members of the corporation who are entitled to vote”.

A two-step transition is not difficult. We urge sport organizations to make their desired membership changes under the Canada Corporations Act. This can be done at your regular annual general meeting. Thereafter, with member categories streamlined, it is a fairly simple task to call a special members meeting to approve the Articles of Continuance and Bylaws to continue under the NFP Act. And because you have streamlined your membership structure, this can likely be an easy-to-organize telephone meeting!

Please contact us if you require any further information.

The recent Olympic Games were the ‘Socialympics’ and, as our colleagues at arnoldi mcpherson illustrated in their excellent report, there were more than a handful of social media issues that sport organizations needed to address.  Though National and Provincial Sport Organizations (NSOs and PSOs) and even local sport organizations generally will not face social media issues of that magnitude – certainly social media issues are not uncommon ‘fires’ that sport organizations regularly need to put out.

Problems or issues (‘fires’) that sport organizations deal with are handled in two parts – proactive and reactive. That is, there are steps an organization takes before the problem occurs that are aimed to prevent it (proactive) and steps the organization takes after the problem has occurred that are aimed to fix it (reactive). Organizations craft Policies that outline a procedure to cover both the proactive and reactive steps.

For example, an organization is likely to have a Privacy Policy that covers how an organization handles its members’ personal information. The proactive steps overview what information can be collected, how it may be used, who has access to it, and so forth. The reactive steps of the Policy will overview what happens if someone has breached the proactive steps – what the member can do, if/how the violator of the Policy should be disciplined, etc. Privacy Policies are typically informed by existing federal legislation (PIPEDA), province-specific privacy legislation, and some existing common law (or case law). The law helps the organization know what to include in the Privacy Policy.

There is no law that directly informs social media use. Instead, some legislation can be applied to social media use (like the legislation related to harassment (cyber bullying), privacy, and defamation) and there is precious little social media-specific case law. So, organizations are typically ‘on their own’ when it comes to crafting policies for social media. An organization does not need a social media policy – like it needs a Privacy Policy informed by the legislation – but many organizations are realizing that a social media policy would be a useful tool to help put out the more frequent social media fires.

Increasingly, in response to requests and questions from sport organizations, we are recommending the following:

• Social Media Use Policy – for the organization’s staff and other stakeholders (internal document)
• Social Media Guidelines for Athletes – ‘guidelines’ not ‘policy’ (internal document)
• Social Media Guidelines for Coaches – ‘guidelines’ not ‘policy’ (internal document)
• Social Media Policy – for coaches and athletes (external document)
• Updated Code of Conduct or Athlete Agreement

The five documents work together to give organizations both the proactive and reactive solutions to social media issues.

Social Media Use Policy

This is an internal document that is used by staff, board members, committee members, and other stakeholders to guide their personal use of social media and their use of the organization’s branded social media. Organizations may use Twitter or Facebook to communicate information to members and the Social Media Use Policy outlines what information should be shared, when it should be shared, who is sharing it (generally a communications person), how and if this person responds to questions and comments in social media, and other best practices for social media involvement. Incidentally, an organization’s social media use should be connected to its strategic plan.

A Social Media Use Policy can also set organizational directives for how staff, volunteer leaders, and stakeholders represent themselves on social media and whether and when they can act or speak on social media on behalf of the organization. If the Executive Director has a personal twitter – how much (if any) of their tweets should be related to the organization?  Should the Executive Director have two twitters – one for personal comments and one for work comments? Staff, directors, and committee members can be considered ‘representatives’ of the organization and, when they are acting in their capacity of a representative of the organization, their social media use should be directed by this Social Media Use Policy.

This type of Policy is not dissimilar to a Communications Policy which some organizations may already have. Employment Agreements may also cover some of the same content and, in lieu of crafting a brand new Policy, could be updated to include communication on organization-branded social media and/or as representatives of the organization.

Guidelines for Athletes and Coaches

The majority of social media ‘fires’ come from athletes or coaches using social media in a way that the organization feels is inappropriate. For example, an athlete might tweet “the organization is corrupt” and the organization might feel it has been defamed. Or, a coach might instruct all his players to join a team-specific Facebook group and a parent might complain about the coach-athlete interactions that are occurring out-of-sight on this online medium.

Guidelines for Athletes and Coaches (which could and likely should be separated into two separate documents) is the proactive step for helping coaches and athletes avoid any situations that the organization may feel are inappropriate and potentially troublesome. Importantly, these ‘Guidelines’ would not be ‘Rules’ or ‘Policy’ – but instead organization-recommended ‘best practices’ or ‘tips’ for the coaches and athletes who are using social media. Every coach and athlete (and parent, and organization, etc) has their own opinion for what is ‘proper’ and ‘okay’ for social media use. Though areas of the law (harassment, privacy, luring, etc) do inform some of these guidelines, there is still no ‘right way’ to interact on social media. Athletes and coaches must use their best judgment – and the organization can take a role here by presenting expert-informed guidelines for use that help guide and develop the athletes’ and coaches’ best judgment.

The Guidelines for Athletes and Coaches could be distributed internally to these groups or be part of the registration package or other communiqué from the organization to its members. The Guidelines would include general tips like ‘watch what you say’ and ‘careful with your language’ – but also more specific guidance for athletes (like what to do if your coach adds you to Facebook) and for coaches (like what to do if you see a picture of a minor athlete drinking). Organizations may also desire a more detailed education component – like a clinic or training session held at a coaching conference or AGM – to aid in the distribution of these guidelines and best practices.

Social Media Policy

This is the main document that most organizations want because it serves to overview the reactive steps of handling a social media issue. But the only real ‘teeth’ the document should have is its references to an Updated Code of Conduct or Athlete Agreement. An athlete who claims, on twitter, that ‘the organization is corrupt’ is still presumably breaching the organization’s existing Code of Conduct. The organization does not need to make distinctions for how or on what medium the athlete violated the Code. If an organization already has policies that cover behaviour and discipline, there does not need to be an additional policy that covers behaviour and discipline on social media.

This Social Media Policy should do two things. First, it should remind the member that behaviour or conduct that occurs on social media is covered under the organization’s appropriate policy for behaviour (the Code of Conduct that applies to athletes, coaches, and other members of the organization, or the Athlete Agreement in the case of national team athletes who execute a specific agreement with the sport organization).  Second, it should reference the Guidelines for use (or training session, clinic, or educational component) that the organization has produced or distributed internally to its members. This Policy can be a very short document.

The updates to Codes of Conduct and Athlete Agreements can also be straightforward. Most organizations use a mechanism (like a registration form or agreement) to remind members that they are held to standards of behaviour which are outlined in an agreement or a Code of Conduct. The organization’s existing standards of behaviour likely already cover most issues that can happen in social media (harassment, defamation, violations of privacy, etc) but the organization should review and update these documents to include standards more specific to social media (such as cyber-bullying).

The main areas where we help organizations when we’re asked about a ‘social media policy’ is with the content contained in the Guidelines and with interlinks among the organization’s existing policies. Most organizations want to discipline members who use social media inappropriately – but defining ‘inappropriate’ is the main roadblock. By adopting the series of documents above, an organization will introduce the proactive step (the Guidelines) and clarify/streamline the reactive step (the Social Media Policy plus the updated standards) which both work in concert with the organization’s pre-existing policies. We have experience helping organizations with these issues so please feel free to contact us.

Kevin Lawrie
krl@sportlaw.ca