The Governance Model

As the number of amalgamated clubs grew, a question that had been largely theoretical at the beginning of the strategy became increasingly important: how should a club spread across so many communities ultimately be governed?

In October 2001, when the Penrith Board asked management to suggest a structure of governance for the entire group, Cowan approached it from the point of view that Panthers had evolved into one club – one business – spread over many sites. On 23 October, he presented a paper to the Board setting out his views, and his recommendations.

I believed that any nine people – normal, reasonable, dedicated people – who could be elected to govern such a club would act in its best interest.  I did not see any reason to believe that a director appointed from Bathurst would be of any lesser quality than one appointed from Penrith.  My approach, therefore, was to have as much representation as possible from outside Penrith in the governing body, without making a Board that was cumbersome by its size. 

Having a spread of representation from all sites would display a commitment to the principle of amalgamation rather than takeover. In addition, it would ensure that every decision was argued from the point of view of benefiting the entire group rather than one of its sites.  My recommendation was therefore to have a nine-person board, to include three representatives from the Penrith club and a maximum of two from any other club. That would have ensured input to group policy by at least four out of the 14 sites, and possibly as many as seven.

All sites including Penrith would elect their own governing bodies to handle the local issues.

To my way of thinking Panthers was no longer a Penrith club. It was a NSW club with its largest branch and most of its administration at a Penrith headquarters, and other important branches in other areas of the state.

When Cowan put his group board model to the Board, it was met by hostility. He was accused of trying to ‘sell off’ Panthers to outside interests. John Bateman told the Inquiry the paper ‘set alarm bells ringing’. He said,

It was something that I didn’t agree with. We made it clear to management if we were going to go into amalgamation with other clubs, it was essential that the Penrith entity maintain control of the whole organisation.

But was that consistent with the Board’s earlier decisions?

This was moving the goalposts in the middle of the game.

Bateman was legally trained, and he had been party to all the discussions about the parameters within which management could pursue amalgamations.¹ The Board had approved parameters that did not discriminate between members, no matter where they lived. The memoranda of understanding offered full membership rights to members of amalgamating clubs.

Evidence to the Inquiry revealed the viewpoint of some members of the Board. Asked what he saw as the threats in the amalgamation with ClubNova in Newcastle, Bateman admitted that some directors feared losing control of the organisation. When asked if that included the possibility that he could be voted off, he said yes, that that was the case.

Throughout the Inquiry, the Footy Five directors spoke of their desire to look after the interests of Club members.

On further questioning, however, they admit that the members they refer to were Penrith members. Evans even said that he did not believe that it was right that members of the amalgamating clubs should have the same rights as the Penrith members.²

But the Board set the policies, and all amalgamations were completed within those policies.³

Cowan saw the notion that he was ‘selling off’ Panthers as just another red herring. In his model, Penrith would still have had its own advisory board. It would retain its identity and its importance as the headquarters of the group.

Management had pursued the concept of amalgamations with great success. But it was such a success that those directors opposed to Cowan’s governance model came to a different view of what the amalgamation structure should be.

What they wanted was takeovers.

But by then the Club had agreed to amalgamations on terms agreed by the Board.

After the Board rejected Cowan’s group board model, he put a modified version to a subsequent meeting.

I still believed that the Board would be more productive if it had less Penrith people and more representation from the entire group. I thought the modified version might be seen as a suitable compromise although the principle was the same. 

Craig Terry became quite agitated and said something to the effect, “How dare you keep raising a suggestion that you know the board does not want to hear”. 

Imagine if the Board of Telstra or Microsoft decided to opt for a situation in which their CEO was restricted from telling them anything they didn’t want to hear.

We were back on the diving tower again.⁴

As the Club continued along the amalgamation path, the divide between management and some directors grew.

In Macquarie St in Sydney, Panthers’ amalgamation strategy was attracting attention.

---

---

1. Moreover, , as noted earlier, the Board required management to submit each individual amalgamation to the Board for approval.
   ↩︎
2. The Temby Report subsequently found that concerns about the growing membership of amalgamated clubs included concerns among at least some existing directors about protecting their own positions. Temby also found that Cowan had been authorised by the Board to represent to members of amalgamating clubs that they would have the same entitlement as existing Penrith members, but that subsequent Board actions resulted in those promises being broken. See Inquiry In Relation To Penrith Rugby League Club Ltd — conducted by Ian Temby QC —Report, Chapter 4, Amalgamations, and Chapter 7, Voting Rights — Promises Made, Then Broken?.
   ↩︎
3. The original manuscript continued here with a broader reflection on the different perspectives Cowan believed business people and politicians brought to decision-making. That section has been removed from the main narrative and is available in Beyond the Book: Politics, Business and Two Different Visions of Panthers.
   ↩︎
4. The “diving tower” was introduce in Part 37 — The Myth of the Footy Five. ↩︎

---

Commentary and Contributions