Provincial Unions reject NZ Rugby's proposed governance reforms

Provincial Unions have rejected New Zealand Rugby's governance change proposal, voting for a second proposal, backed by a group of PUs, instead.

NZR's voting members, the 26 Provincial Unions and the New Zealand Māori Rugby Board, were asked to vote on two proposals.

Proposal one, which was backed by the NZR board and essentially adopted all the recommendations from last year's independent governance review, failed to get the two thirds majority vote required, with 31 votes for and 59 against.

A second proposal - put forward by a group of provincial unions, including Auckland, Wellington and Canterbury - to make the board independent, but with at least three members with previous provincial union experience, received the majority it needed, getting 69 votes for and 21 against.

The vote is constitutional change, meaning the proposal that was accepted, proposal two, can't be amended before the NZR annual general meeting on 26 July, after which the governance changes will begin to be made.

Background

In May, New Zealand Rugby put forward proposal one to be voted on.

Proposal one essentially adopted all the recommendations from last year's independent Governance Review, led by David Pilkington and known as the "Pilkington Report".

Read the two proposals here.

Under the plan the current NZR board would be replaced by an independent board of nine members to be selected by an independent expert appointments panel.

This was a major backdown from NZR's initial proposal put forward in March.

New Zealand Rugby Players Association (NZRPA) chief executive Rob Nichol at the time said the new direction was "excellent and outstanding, hopefully the game can get in behind it".

The NZRPA originally commissioned the Pilkington Report, which found NZR's current governance model was "not fit for purpose in the modern era".

At present, the board is made up of nine members, three of whom are elected, three appointed, and three nominated. One of the members is automatically appointed as the NZR representative on the New Zealand Māori Rugby Board.

Aside from the main concession in the board reapplying, NZR's new proposal will establish an initial Appointments Panel. The panel will either confirm board members for the balance of their terms or consider them against other possible candidates.

The recommended new slate of board members would then be put to the voting members for ratification. This panel would comprise Julia Raue (chairperson), Whaimutu Dewes, Rob Fisher, Peter Kean, Dame Farah Palmer and Caren Rangi.

The initial panel would serve for the 2024 and 2025 appointments cycles.

Proposal one was up against another proposal (proposal two) put together by a group of Provincial Unions (PUs) including Wellington, Auckland, Canterbury, Hawkes Bay, Bay of Plenty, North Harbour and Northland.

Proposal two essentially guarantees Provincial Union on the NZR board by demanding three of the nine directors have previous experience on a provincial union board.

The majority of the NZR board, the Super Rugby franchises, the New Zealand Maori Rugby Board, the NZRPA and some provincial unions are expected to vote for an independent board.

However, before today's vote, David Pilkington, the chair of the review panel, wasn't confident proposal one would win out, believing it would be scuppered by the PUs who wanted to retain the "status quo".

The Players Association threatened it would walk away from New Zealand Rugby if proposal one was not accepted.

Before the the SGM the NZRPA stated that it intends to form a new body, which will be established to govern the professional game if proposal two was approved instead.

The NZR board chairperson, Dame Patsy Reddy, has said previously she would resign if the proposal her board backed was rejected.

At the request of the governance review commissioning parties, NZR and New Zealand Rugby Players Association, an independent review panel has reviewed the two proposals. This was conducted to consider whether each proposal aligns to the principles and recommendations of the Pilkington Report.

It unsurprisingly found that proposal one was almost entirely consistent with the report's initial recommendations. However, proposal two was found to be inconsistent in several areas, mainly focused around the makeup of the NZR board and how the members are appointed.

The main area of criticism of proposal two was the requirement for at least three directors to have previously served on provincial union boards. According to the review: "it may be that this is the case for some successful candidates but mandating the requirement is a limiting factor on the potential pool of candidates. The logic behind the requirement is unclear."

While stating that proposal two was broadly consistent regarding diversity, the review said that "the stipulation of three directors with provincial union governance service has the potential to limit the divert of thought around the NZR board table."

It also said that: "It is of particular concern that this proposal seeks decision making power over the skills and competencies framework for the NZR board".