UK - The Premier League has introduced a series of measures to ensure clubs meet the highest standards of corporate governance.
The rules, which follow a study based around research by Investor lobby group Pensions Investment Research Consultants, are designed to increase accountability to shareholders.
The rules govern who can become a club director, penalties for insolvency and requirements for transparent annual reports.
The guidelines - voted in by the clubs - follow last year’s study by the Football Governance Research Centre at Birkbeck College Management School into arrangements across the football leagues.
This used compliance with the combined code on corporate governance as a comparator, and found that overall standards were “well below” those of listed companies.
PIRC warned that many clubs were facing a “perilous financial situation”.
For the majority of football clubs the combined code is not a requirement as they are unlisted, and the past year has seen record losses at Leeds United and Bradford City going into administration.
The new rules, which come into force immediately, are intended to prevent further collapses and stop clubs “living beyond their means”.
They include the introduction of:
- A “fit and proper person” test to prevent anyone convicted of a range of offences, or who has twice led a club into insolvency, from acting as a director.
- Enhanced directors’ reports which are subject to independent audit.
- Directors’ declarations of shareholdings to ensure that dual ownership rules are adhered to.
Premier League chief executive Richard Scudamore said it was “good for the game” that the rules were in place.
He said: “By voting in a fit and proper person test, along with the other rule changes, the clubs have made a very public statement that the professional game is, and expects to be, run to a high standard of corporate governance. It is for the good of the game that these rules are now in place for all to see.”
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