Sport Employees Unite (SEU) the trade union representing the non-playing staff in rugby has called for better corporate governance following the liquidation of the Southern Kings.

“The announcement by the Southern Kings that they have opted for voluntary liquidation came as a shock for everybody. When the announcement was made on 25 August 2020 that the Kings will not play in any domestic rugby competitions this year, no mention or indication was given that the Southern Kings will not be able to honour its contractual obligations towards the players and staff. It appears that at that stage already the financial position of the Kings was desperate.

We are of the view that the board of directors should have engaged with the players and staff as soon as they knew that the Kings was in financial distress. The Companies Act makes it clear that if a company is financially distressed it may be obligated to initiate business rescue proceedings or alternatively furnish written notice to all affected persons of the fact and stating reasons for not placing the company in business rescue. This did not happen and it robbed us of an opportunity to discuss and engage on it”, says Piet Heymans, Chief Executive Officer of SEU.

The manner in which the announcement was made together with the fact that no assistance has been offered to the players and staff have resulted in anger and criticism.

“There are many questions that need to be answered and hopefully during the liquidation process, it will be. What aggrieves our members is how this has been handled. To just call your employees to a meeting and cold and clinically tell them that they do not have a job anymore without providing any form of assistance or support leaves a sour taste in everybody’s mouths and do not take into account the human tragedy that is left behind”, says Heymans.

SEU firmly believes that corporate governance must improve and the criteria for rugby unions to participate in professional competitions must change.

“The corporate governance in the rugby industry is not up to standard. It must be improved. Our experience has been that many rugby unions do not adhere to the guidelines of the King IV Code. Corporate governance should be concerned with ethical leadership, attitude, mindset and behaviour and the focus must be on transparency and thoughtful disclosures. We are not seeing this in rugby!” says Heymans.

“There must be strict criteria including financial norms that must be adhered to before a rugby union can participate in a professional competition. France has successfully implemented such a model for participation in their Top14 competition and they have not had to deal with liquidations and human suffering! We can not just continue in the manner we are. There must be change as we have to protect the rugby industry for the sake of all stakeholders,” concludes Heymans.