Governance at Blues a dismal failure

John Kirwan before the Super Rugby Pre Season game between the Blues and the Chiefs at Toll Stadium. Photo / Heath Johnson

Odd impasse over the coaching position direct consequence of the structural changes made in 2013.

According to the New Zealand Rugby Union, there were two major objectives when in September 2013 it opened up a share of the Blues to a private equity company. One was to reduce pressure on its own balance sheet while bringing money into the franchise. The other was to sharpen governance skills at the Blues. The first may have served the rugby union's own purposes well, even if the injection of funds has failed to lift the Blues' on-field performance. By any yardstick, however, the attempt to improve off-field governance has failed miserably.

As much has been made clear by the ongoing imbroglio over the team's coach, Sir John Kirwan. A split on the Blues board means his future remains up in the air. This unsatisfactory situation is a product of the governance structure decided upon when Bolton Equities bought in. It holds a 40 per cent stake but has three directors, Murray Bolton, Laurie Margrain and John Morgan. Sixty per cent is held by Rugby Holdings, representing the Auckland, North Harbour and Northland rugby unions. It has two directors, Brian Wilsher and Greg Edmonds, and the six-man board is completed by a non-voting chairman, Tony Carter.

The Auckland Rugby representatives want alternatives to Sir John to be investigated because of his poor record with the Blues over three years. The Bolton Equities directors want to keep him on. On several levels, this is an odd situation. It might have been assumed that the rugby representatives would take a long-term perspective and, in the interests of continuity, be keen to retain one of Auckland's favourite rugby sons.

It might also have been assumed that the Bolton Equities directors would have wished to extract the best commercial return from the franchise and have been quick to axe any poorly performing staff member. It has not worked out that way. The rugby representatives may be on the board to safeguard the Blues from the unseemly hiring and firing that is rampant in, for example, English football. But they have clearly concluded that Sir John's record does not pass muster.

For their part, the Bolton Equities directors, who are experienced in business but not rugby, appear to have been seduced by his charisma and what this delivers in the corporate and marketing world. Mr Bolton has also stated more than once that he is in the franchise for the long haul. That is to his credit. But the Blues' poor performance is surely limiting those marketing and sponsorship opportunities, as well as gate takings.

The situation has been further complicated by the Blues' constitution dictating that governance is split 50-50, and any decision must be reached by consensus, not a majority vote. This is not a recipe for decisive decision-making. Indeed, it can, and has, led to an impasse. Consequently, the rugby union has been asked to mediate over "relationship issues".

As it seeks to patch up this mess, the rugby union should also ponder the obvious flaws in the governance model. A similar structure has been applied at the Hurricanes and the Crusaders without friction between the rugby and business worlds. At the Blues, however, it has created a preposterous situation that sees accountability taking a back seat and prospective replacements for Sir John looking on askance.