The role of social responsibility and governance in shaping the future of clubs

We recently sat down with NSW Club leaders to discuss Environmental, Social, and Governance (ESG) considerations on the Club industry in the short to medium term. The International Sustainability Standards Board (ISSB) has now released their standard on Sustainability, and Treasury has sent a draft policy on how the standards will be adopted in Australia. Although there is no set guidance at this stage, it is most likely Clubs will need to adopt this standard in FY26.

Social Responsibility has been a significant focus for Clubs, particularly surrounding the media and regulatory scrutiny the industry has been under in the past five years. Clubs are a significant employer in NSW and have further developed their people policies to ensure they are not only providing a safe and enjoyable work environment for their employees, but also focused on diversity and inclusion and equal opportunity. 

The industry has witnessed a notable increase in female leaders at both management and Board levels, although most Clubs recognise there is still more to be done. Clubs also live, work and breath within their surrounding communities, often heavily involved in community groups such as sporting clubs and seniors organisations. It’s clear that Clubs have significant Social impact on their communities, but the key will be how they best capture this information in a reportable format and focus on the areas that matter most.

Governance continues to be a focus for all Clubs with the main concerns being Board succession and getting the right experience and diversity around a Board table. With no silver bullets in this area, Clubs noted a number of potential barriers to Board attraction, particularly from the younger demographic. Key factors to attract Board members include the clear articulation of the Clubs’ values, its importance within the community, and how to best reach the target demographic so the values resonate and urge action and commitment. 

Other barriers to Board succession planning and achieving the right diversity mix relate to constitutional restrictions which, if members agree, are elements that could give Boards more flexibility to recruit and attract the right talent. The smart use of Governance models are a method to encourage participation and ultimately put in place a succession plan. Depending on the Club’s constitution, the use of advisory committees or sub-committees where Board membership is not required, could be an entry point for new starters to Board roles, or those wanting to contribute but have limited time capacity.

The right skills mix is also a key Governance issue and is highlighted by recent activities within the Anti-Money Laundering and Counter Terrorism Financing (AML/CTF) compliance space. As many Clubs provide gaming facilities, it is important for the Board to recognise and understand the compliance obligations and risk exposure relating to money laundering and terrorism financing (ML/TF). NSW State Government initiatives such as carded play has the potential to significantly disrupt the industry, and Boards and Executive Management will need to be cognisant of these impacts, and what it means for their business strategy, the potential financial impact this could have on gaming revenue, as well as patron experience. 

A question for Boards to reflect on is whether they have the right mix of skills to identify these or similar issues before or as they arise and ask management the right questions to gain comfort that the appropriate responses, including controls, are in place.

Before reporting officially commences, Clubs are already experiencing questions about their Governance through relationships with financiers, who are now requiring significant information about their sustainability practices before supporting investment decisions. We expect the rigour and extent of such information to increase over the coming years. It’s important that all Clubs start this journey now or they will be left behind as their long-term viability will be determined by not only their financial sustainability, but also their broader impact on their communities through sustainable practices. 

Please get in touch with our specialists to discuss how we can assist your business to be on the front foot and be ready for when the standards and reporting are introduced. 

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