The use of large up-front fees and disproportionate deposits has already resulted in significant cost consequences for one care provider.
As you will remember charities promoting sport and physical activity must comply with the Code to be eligible for Sport England funding. We covered this in our e-briefing late last year.
After narrowly failing to pass a special resolution to amend their articles of association to comply with the Code, TTE is unable to draw down the next tranche of the £9 million the charity was due to receive from Sport England between 2017 and 2021. The resolution received support from 74.93% of those voting – falling just 0.07% short of the required threshold. So presumably the charity trustees will be searching to agree on a way forward.
The AGM agenda can be seen here. The explanatory text preceding each Special Resolution gives a sense of the background to the situation. It appears that some members of Table Tennis England feel that the changes proposed by the directors of TTE to comply with the Code would remove ‘control of the sport in this country from the members for the first time in since our formation in 1926’.
This scenario was anticipated in the article referred to above, which observes:
‘The current code requires a proportion of board members to be ‘independent’. That requirement will need to be considered carefully by the many membership charities that are seeking Sport England funding on the basis that they can deliver physical activity and ‘help create a much healthier and more active nation’ as the Government’s strategy for sport Sporting Future envisages. Many membership charities see it as a key part of their identity that trustees are drawn from their membership and some would find it difficult to introduce a requirement to recruit from non-members in the interest of independence. Such organisations will need to be able to justify the approach they adopt and demonstrate how they ensure that trustees are able to avoid group think.’
It will be interesting to see how successful the efforts of the directors to negotiate a compromise prove to be. We hope in the interests of grassroots members – and those who could yet enjoy the benefits of taking up table tennis – that a solution can be brokered soon.
In any event, this is a demonstration of the importance of compliance with the Code. It also highlights the importance to National Governing Bodies and other membership bodies in this sector of identifying a clear strategy for implementing constitutional change, formulating proposals for change with care, and communicating those proposals effectively to their members.
Table Tennis England has issued a statement and Sport England is due to do the same shortly.
Many in the sector will be watching with interest.
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