The Diversity of Director Election Rules in Australian National Sporting Organisations

Abstract

An important governance issue is the voting rules that apply to elections of directors given that, as the Federal Court of Australia has stated, directors are ‘an essential component of corporate governance’ who are ‘placed at the apex of the structure of direction and management of a company’. The authors study the director election rules for the 15 leading Australian National Sports Organisations (NSOs). These NSOs are recognised by the Australian Sports Commission as the pre-eminent bodies for the sports they represent and each NSO is a company. The authors identify significant diversity in the director election rules of the NSOs. Based on the number of balloting rounds (whether the NSO has a single ballot or exhaustive ballot voting system), vote weighting, majority voting rules, and whether there is preferential voting, the authors identify 12 different types of director election rules. The authors explore possible reasons for this diversity, observing that all of the different voting rules can be viewed as a form of trade-off between the need to (1) promote efficient collective decision-making in director elections; (2) have voting rules that accurately reflect the preferences of voting members; and (3) in some circumstances allow the interests of certain members to receive greater priority by the use of weighted voting.

Keywords: director elections; voting rules; sports governance; corporate governance