National body urged to make progress on corporate governance reform
According to a review of taxpayer-funded sports released by the Australian Sports Commission last week, Cycling Australia (CA) has been urged to make "rapid progress" on corporate governance reforms and establish a "stable financial platform for growing the sport" this year.
While several sports such as swimming, hockey, rowing and sailing were all found to have had made significant progress overhauling corporate governance practices cycling and athletics were marked as still facing challenges.
The AIS Sports Tally report stated that Cycling Australia: "has made limited progress towards implementing the ASC's mandatory governance principles." These include an increase in the number of female directors and stringent disclosure requirements regarding executive pay and related-party transactions.
When Orica-GreenEdge owner Gerry Ryan was named CA president in November with a mandate to overhaul the organisation, Cycling Australia's management was overhauled in part, due to concerns of the financial situation of the national body. According to CA's last annual report, published in 2014, the organisation recorded a deficit of $572,686 in the 2013 financial year.
The loss in the annual report – was the last under the leadership of former CA chairman Klaus Muller – has been attributed to the negative result to the drain on cash needed for the organisation's commercial joint venture with Grass Roots Australia and promoter Michael Edgley and "aged insurance claims drawn against deductible commitments that were not adequately provided for."
CA's revenue fell from around $17 million in 2012 to $14.7 million which included a $200,000 fall in sponsorship. CA's net assets also dropped to 60,158 from $632,844 in 2012, while the cash in the bank fell almost $800,000 to about $1.13 million as reported in AFR.
The joint venture with Grass Roots Australia, formed in 2010, was to undertake and manage CA's commercial affairs such as running events and managing broadcast and sponsorship deals.
However, as the venture has proved costly for CA and interim chief executive Adrian Anderson announced that the partnership has now been dissolved and that CA are taking active steps to shape a new commercial model. Anderson recently re-committed to CA but his long-term future with the national body is uncertain.
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