At the beginning of June, an email arrived in the inboxes of Equestrian Australia’s four directors. Co-signed by the chief executives of Sport Australia and the Australian Institute of Sport, it marked a dramatic escalation in a governance dispute that has thrown equestrian sports into disarray. The attached three-page letter informed EA that the federal government was cutting off its funding, transferring the sport’s high-performance program to the AIS and seeking the repayment of unspent funding. EA’s governance, the letter read, “has proven itself manifestly unfit for purpose and now needs to be overhauled”.
In Sport Australia’s 35-year history, the government agency has never taken such a dramatic step. The move forced EA into voluntary administration and left the peak body on the brink of liquidation. “We do not take these steps lightly,” the Sport Australia–AIS letter continued, “but do so with a view to the long-term best interests of the sport of equestrian.”
Helen Hamilton-James, a partner at Deloitte, had been on the board of EA for barely a year. “I was shocked, surprised and angry,” she recalls. “Our initial response was, ‘Hang on, we’re trying to fix this, what are you doing?’ But on reflection, from their perspective, we’d had 12 directors within a year, the board kept changing, we couldn’t get anything done – you can understand why they acted.”
The origins of this unprecedented rupture lay in EA’s labyrinthine governance structure – a federated model, with six constituent state bodies. The sport itself is divided into numerous, distinct disciplines. “It is not just one sport,” explains Hamilton-James. “We had 70 different committees within the organisation. How can you get anything done with 70 committees?”
Matt Miller, formerly the chief executive of Sport Australia, when it was the Australian Sports Commission, and more recently the head of the New South Wales Office of Sport, has been brought in by the state bodies to chair a governance reform working group. “This is a sport that has been dysfunctional for many years,” he says. “Equestrian is a highly factionalised sport. With eight disciplines, each discipline thinks they are the important one.”
Over time, this complexity fostered mistrust and exacerbated disputes. “We have had 10 years of a lack of trust between the states, between the states and EA, and among the members,” Hamilton-James says. While the EA board had been trying to overhaul the organisation’s governance, they were met by resistance from the states – which have sole voting rights under EA’s constitution. “It was impossible to make any changes.”
The Sport Australia–AIS letter was a decisive intervention. “It was a real circuit-breaker to get a process in place to begin the renewal of the sport,” says Miller. With government funding amounting to almost half of EA’s revenue, the board had no choice but to enter voluntary administration, appointing KordaMentha. In July, a meeting of creditors approved a deed of company arrangement (DOCA), whereby the administrators were tasked with implementing “a new governance model … that delivers change and [a] genuine democratic outcome”.
The governance saga has seen EA “de-recognised” by the Australian Olympic Committee. While the administrators sought guarantees from the AOC about EA’s readmission, Australia’s Olympic federation insisted that it would consider any such request on a “de novo” (as new) basis. International peak body Fédération Équestre Internationale told the administrators EA would continue to be recognised on a temporary basis, with the FEI to review EA’s standing following the reform process.
“From our point of view, all we have said is that under the Olympic charter, sporting bodies need to be independent of government, democratically elected by members, and they need to have athlete representation,” says AOC chief executive Matt Carroll. “The administrators acknowledge those things as important. Once the restructuring has been achieved and the sport is back on its feet, they can be admitted as a member of the AOC again.”
For now, at least, the dispute has not had a direct impact on high performance, with competitions on hold and the Tokyo Olympics postponed by Covid-19. Equestrian has long been a source of Olympic medals for Australia – the eventing team won silver in 2008 and bronze in 2016, while Andrew Hoy is the only Australian to have competed in seven Olympics, winning three golds during his illustrious career and hoping to gain selection for Tokyo.
“There is no impact on the athletes whatsoever,” says Carroll. “There is absolutely no risk that Australia would not be sending an equestrian team to Tokyo.” According to the AOC, if EA is not readmitted as a member by early 2021, the AOC will take steps to independently select an equestrian team for the Olympics.
But AIS director Peter Conde concedes that the turbulence is hardly ideal preparation for Tokyo. “It definitely complicates things,” he tells The Saturday Paper. “To have really effective high-performance programs, we need really effective governance – it starts at the top. So the AIS has great interest in ensuring the governance of the sports is undertaken in accordance with well-established best-practice protocols.”
On Tuesday, September 15, EA will hold a special general meeting to vote on proposed constitutional changes. The most significant amendment is to classify individual members of state bodies as voting members of EA – a “one member, one vote” model. This would considerably weaken the institutional control of the state bodies, and satisfy the requirements of the AIS, Sport Australia and the AOC for a more democratic governance structure. “Through these amendments, the 18,000 Participating Members will have a much more powerful voice with the democratic right to vote,” the administrators said in an explanatory document.
At the mid-July creditors’ meeting, almost 2000 individual members voted on the DOCA and the governance reform it proposed. Seventy-seven per cent voted in favour, with Tasmania the only state to have a majority of members cast their ballots against the proposal. But like turkeys asked to vote for Christmas, the state bodies are resisting reform that would limit their control of EA.
State resistance has taken a number of forms. Equestrian South Australia and Equestrian Victoria have both written to their individual members raising concerns about the process. Equestrian Victoria’s email newsletter, for example, raised the spectre that “ ‘one-member, one-vote’ cannot be achieved due to a number of States not in agreement”. It continued: “Under the proposed constitutional changes, the representation of smaller states and smaller disciplines has the potential to be marginalised by larger states and disciplines.”
Over the past month, the dispute between state bodies and the administrators has turned ugly. In correspondence to KordaMentha, several states have claimed variously that administration was improper as EA remained solvent, that the DOCA voting was invalid and that the administrators had failed to properly engage with the states. In a strongly worded letter, KordaMentha accused the states of “clearly not listening to, nor respecting the position of the Participating Members of EA”.
Sources have told The Saturday Paper that both Equestrian Western Australia and Equestrian Tasmania made it clear they would not vote for the change – effectively vetoing it. If the proposed reform does not pass, EA will be placed into liquidation. “That would be an appalling outcome,” says Hamilton-James. “I can only hope that rational heads prevail.”
In recent weeks, it seems that Miller has helped broker a compromise between the warring parties. The most recent constitutional reform proposal, publicised in late August, retains “one member, one vote” but also protects the interests of states. It provides that future changes to the constitution require 75 per cent member approval and endorsement from five of six of the states.
“A member-only vote leads to member-interest-only outcomes,” says Miller. “But there are many other stakeholder interests to be taken into account, plus the overall interests of the sport – not just dominant states or dominant factions.” The middle-ground approach, he suggests, will protect the interests of the entire sport. “Otherwise the big states or the big disciplines will dominate.”
This compromise has angered other stakeholders. Last week, an open letter circulated online from a group named Riders for Reform, signed by hundreds of individuals including high-profile Olympian Edwina Tops-Alexander and equestrian legends Barry Roycroft and Art Uytendaal. “We have a once-in-a-generation opportunity to reform for the benefit of all equestrian sportspeople now and into the future,” the letter said. “We request that the state branches remove the veto power from the constitution and allow this to occur.” At time of writing, there was no indication the states were budging from their veto.
On Tuesday, the votes will be cast. If the reform passes, a transitional board will be appointed and EA will move out of administration. All going well, Sport Australia and the AIS will resume their funding and the EA will be re-recognised by the AOC. Does this mean the crisis is averted?
“The administration is not the end,” says Miller, a veteran sports administrator. “It is the beginning. Reform is not going to happen in four or eight weeks. The administration has set in train a process that could take 12 to 24 months to deliver sustainable reform to the way equestrian in Australia is delivered.” The hard work starts now.
This article was first published in the print edition of The Saturday Paper on September 12, 2020 as "Horse wars".
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