RFU criticised for lack of consultation over bonus row engulfing Sweeney
An independent review of the bonus controversy engulfing the Rugby Football Union and its chief executive Bill Sweeney has criticised a lack of consultation with the RFU Council.
The review, conducted by law firm Freshfields, backed the RFU’s design and implementation of its long-term incentive plan (LTIP), which saw Sweeney receive a £358,000 bonus last year, when the governing body made record losses and redundancies.
But Freshfields concluded that there was insufficient transparency around the LTIP both in communications with the RFU Council, which has also found itself under fire, and in the RFU’s annual reports.
“It is clear that there was no direct communication with Council on the LTIP during the Relevant Period,” the report said.
As a result “a number of the Board governance structures and processes (in particular the expected interaction between the Board and the Council) could benefit from comprehensive review”, it added.
Sweeney’s bonus payments took his overall remuneration to £1.1m for 2023-24, when the RFU lost almost £40m. He faces a vote of no confidence following the Six Nations after more than 180 clubs and bodies called for his removal.
He has defended the payment, based largely on the RFU meeting financial targets over a rolling three-year period. The Freshfields report found that Sweeney asked for the bonus to be deferred but that the RFU remuneration committee decided it was not justified.
‘Marked lack of consideration’ from RFU
Freshfields said “the process for the design and implementation of the LTIP was robust and the structure was sufficiently tested against the RFU’s objectives, governance standards, stakeholder expectations, and best practice”.
It was not asked to report on whether the size of the bonuses paid to Sweeney and other RFU top brass was appropriate, but noted that the RFU used a third party to benchmark the incentive scheme and that there was no conflict of interest.
The key shortcomings were found to be in the RFU’s communication with its Council, which represents the wider game.
“There is no evidence that Council Members as a whole were briefed either before the LTIP was introduced, or at any other time during the Relevant Period,” the report said.
“The lack of awareness of the key details of the LTIP on the part of Council Members demonstrates that there was a marked lack of consideration given to communication with Council Members about the LTiP and the consequent furore that might ensue once details of the payments were finalised.
“Furthermore, while the RFU’s Annual Reports during the Relevant Period contained basic information on the LTIP, we have found the level of detail provided in those reports to be insufficient, especially when compared to the customary level of disclosure in respect of such a scheme in corporate disclosures.”
On the period leading up to publication of the bonuses, it added: “Given the reaction from the Council in late 2024, it is clear that the RemCo and the Board should have actively considered a separate engagement with the Council in particular. We have seen no evidence that suggests earlier engagement with the Council was contemplated.
“Given the duty of the Board and its committees to consider how best to manage the communication of matters that are likely to be contentious, the Board could have better anticipated the eventual reaction of both the Council, the wider game and the press once the Annual Report was published.”
RFU ‘notes’ report recommendations
RFU President Rob Udwin said: “We are pleased the report from Freshfields recognised the design and implementation of an LTIP and its vesting were appropriate in the circumstances.
“There are some specific recommendations and wider observations on the governance structure, the roles of Council Members on the Board and Committees, and the communication routes between the Executive, Board, Council and wider game.
“It is important to recognise these, and they will feed into and inform the current Governance and Representation Review, and the Communications Review that was agreed with Council in December. The review also suggested there could have been further disclosure in the annual report and accounts on the LTIP; this point is noted.”