Good governance wins more than trophies

Good governance wins more than trophies. It protects reputations, secures funding and keeps clubs on the pitch.

Within cricket, 10 out of 18 county clubs reported losses in a single year. Five counties now face funding cuts for failing to meet board diversity targets, while nine have needed extensions after missing earlier governance targets. The message is clear: sports organisations need to check the scorecard on their governance frameworks.

Recent events at Middlesex CCC show what is at stake. The club’s board has commissioned two independent governance reviews and the Director of Cricket has confirmed his departure. Media reports also indicate that the club faced ECB sanctions for financial regulation breaches, a personal injury claim from a former chief executive and a potential constructive dismissal claim from its recently departed CEO.

These events show how quickly governance problems can escalate into regulatory and legal claims. Every sports club, whether professional or community-based, faces a wide range of legal and regulatory risks affecting not only the club but its members, staff and volunteers.

Beyond the pitch

For clubs facing similar pressures, the Middlesex experience highlights three key areas: governance, employment and commercial and regulatory risk.

Governance

Governance disputes over the direction, management or control of a club can play out publicly, eroding stakeholder and supporter confidence and distracting from performance on the pitch.

When a dispute arises, the club’s constitution should be the first port of call. It will usually provide for general meetings, special resolutions or a disputes committee. Mediation can offer a confidential, cost-effective alternative to litigation.

Clubs should also:

• Check dispute clauses in relevant agreements, including requirements for internal procedures, mediation or arbitration before court action
• Consider specialist arbitration or mediation offered by sports governing bodies
• Follow pre-action protocols and consider settlement before issuing proceedings
• Preserve board minutes, emails and messages once a dispute is contemplated and suspend routine deletion
• Use without prejudice communications for settlement offers and consider a Part 36 offer where appropriate
• Manage external communications carefully to avoid prejudicing the club’s position or exposing it to defamation claims
• Notify insurers promptly, as policies may require early notice of potential claims.

If these routes fail, members of incorporated clubs can seek injunctions, declarations on the constitution or claims by stakeholders. In extreme cases, the court may order the club to be wound up. Early advice can help clubs choose the right route.

Employment

As Middlesex’s departing CEO shows, governance problems can also spill into employment claims, and the Employment Rights Act 2025 (ERA) will raise the stakes.

Employees now have six months, rather than three, to bring most Employment Tribunal claims where the act, omission or dismissal complained of happens on or after 1 October 2026. Earlier events remain subject to the three-month limit.

From January 2027, the unfair dismissal qualifying period for employees will fall from two years to six months and compensation for unfair dismissal claims will become unlimited.

From 30 October 2026, a new duty to prevent third-party harassment of employees, including by fans and guests, will require clubs to take all reasonable steps to prevent harassment.

Clubs should review their policies and processes to reflect the new law and should not overlook staff training and any procedural adjustments needed to put the changes into practice.

Senior exits can raise issues around notice, restrictive covenants, confidentiality and unfair dismissal, and managing several at once is especially difficult. Clubs should:

• Audit employment contracts and HR policies against the new regime, including employers’ new duty to prevent harassment
• Follow and document the appropriate employment process at every stage
• Check notice, termination and restrictive covenant provisions, particularly for senior employees with commercially sensitive information
• Set up appropriate document retention protocols now. With the longer six-month time limit and cases often taking years to reach a final hearing, clubs will need to keep relevant records to meet their disclosure obligations long after the events in question.

Middlesex’s experience shows how quickly these risks can converge. When disputes arise, clubs should act early, taking legal advice before positions harden, considering mediation and keeping contemporaneous records of decisions and communications.

Commercial and regulatory risks

With more than half of county clubs reporting losses, disputes over sponsorship, venues, broadcasting and hospitality arrangements can quickly threaten a club’s viability.

Regulatory action can be just as costly. Middlesex’s reported ECB sanctions are a reminder that governing bodies can impose fines, points deductions or, in serious cases, suspension or expulsion.

Clubs must also meet obligations around safeguarding, data protection, health and safety and, where relevant, charity or Community Amateur Sports Club (CASC) rules. Officers, staff and volunteers can face disciplinary action or, in some cases, personal liability, and members may be affected by decisions taken on their behalf.

To manage these risks, clubs should:

• Review key commercial contracts, including renewal dates, termination rights, exclusivity, performance obligations and dispute clauses
• Maintain clear reporting lines, regular board oversight and accurate records
• Engage early with governing bodies and respond promptly to enquiries
• Keep safeguarding, data protection and health and safety policies up to date and ensure staff and volunteers are trained
• Check directors’ and officers’ liability and volunteer insurance is in place, and clearly document roles and delegated authorities
• Take early legal advice when commercial disputes or regulatory investigations arise.

Strong governance cannot eliminate every legal or commercial risk. However, putting the right frameworks, processes and protections in place can help clubs identify problems earlier, respond effectively and stay on the front foot.

The creation of this article was assisted by Elysia Hunt, Trainee Solicitor in our Employment, HR and Immigration team.