Comment from Peter Saxon.
Early Monday morning I posted an opinion piece titled By the End of Today One of These Men will be Proved Wrong. It ended with the line: “By C.O.B. today, someone will have egg on their face.”
It followed an on air stoush last Friday between 2GB’s Drive host Ben Fordham and Rugby Australia Chairman Cameron Clyne.
Clyne had called the station to ‘set the record straight’ about an earlier discussion Fordham had with the station’s Sportzone presenter James Willis. A clearly agitated Clyne, told Fordham, “I’m calling because I was just staggered at the number of untruths James just unleashed. It was just gobsmacking, and I thought, I can’t just let those stand.”
For his part, in that earlier discussion, Willis when asked point blank: “Can she survive?” Shot back: “Absolutely not!”
Both interviews, in full, are available here.
The “she”, of course, is RA CEO Raelene Castle. “Rugby Australia should sack Raelene Castle by the end of Sydney Live today,” thundered Willis. “She should clear out her desk and go.”
He went on to say, “There’s a board meeting on Monday and I can tell you that already board members have told me today (last Friday) that they are talking about the idea of dismissing Raelene Castle. That will be discussed on Monday for the simple reason that they were kept in the dark on the Israel Folau matter. They were told Folau would be sacked, no money entitled.”
It was well past 7:30pm on Monday when I sent a text to Ben Fordham inviting him to comment on the fact that the RA board had met and nothing had been mentioned about Raelene Castle being sacked. I asked Ben how Willis could have got it so wrong?
By then, Fordham was on annual leave and still grieving for his father who’d passed away just a few weeks ago. Yet, he was kind enough to engage with me in a series of texts.
Ben: What did he (Willis) get wrong?
Me: He said she would be gone by COB today. Instead, Castle’s been confirmed by the board as the CEO.
Ben: I don’t remember him saying that. Can you please send me a direct quote.
Me: No that wasn’t a direct quote. But he made it very clear that the board was tired of her and would be voting her out.
Ben: Nobody said it would happen today. I’ve covered enough political coups to know when it’s all over. It’s all over.
Which is true. If you’ve read the direct quote above, he says only that, “they are talking about the idea of dismissing Raelene Castle.” I didn’t quote Willis directly but I should’ve.
What he actually said was, “There’s a board meeting on Monday and I can tell you that already board members have told me today (last Friday) that they are talking about the idea of dismissing Raelene Castle. That will be discussed on Monday for the simple reason that they were kept in the dark on the Israel Folau matter.”
Nonetheless, I reckon we’ve halved the hole because after Clyne refuted Willis’ claims outright, Fordham finished the segment asking him, “So, this board meeting on Monday, you’re 100 per cent confident that no one will raise Raelene Castle’s future at that board meeting?”
Clyne replies: “I’m 100 per cent confident.”
I finished the article with this: By C.O.B. today, someone will have egg on their face.
Well, it certainly wasn’t Cameron Clyne.
As I said last time, I don’t know much about Rugby or how the game’s administered but I do know a bit about business and how boards work, having been in and on a few over the past 30 years. And I can tell you this, if it is true, as James Willis claims, that Raelene Castle kept the board in the dark over an issue as important to both Rugby’s finances and reputation as the Folau payout, then she should, indeed, have been sacked and quickly.
On the other hand, the RA Chairman had this to say, “The Rugby Australia board and the NSW board, both boards, were fully informed, and both were unanimously supportive of the settlement discussions.”
Here’s why Clyne’s version of events is more credible than Willis’: In any organisation with a board of directors, where none of them own a majority stake, they are all answerable to one another because under corporate law they are ‘jointly and severally’ responsible for the financials and solvency of the business.
It is almost inconceivable that the RA CEO and a team of lawyers would go to a mediation / negotiation with Folau and his lawyers without and strict riding instructions as to what they were prepared to accept to settle the case and prevent going to court..
If, at the mediation, Folau wanted something outside the approved parameters and Castle felt that the deal was worth considering, she could have easily told the mediator that it was beyond her authority to make the deal on the spot but would speak to her colleagues and recommend it to the board.
As to the assertion by Willis’ that the board was kept in the dark on the Israel Folau matter: “They were told Folau would be sacked, no money entitled.” If that’s how naïve the RA board is then, being ‘jointly and severally’ responsible, they all deserve to be sacked. It should have been obvious to experienced directors that there was no guarantee Folau would go quietly and that once lawyers got involved anything could happen.
What no one could have predicted is that millionaire Folau would raise indepndent funding from the Christian lobby which meant that he could run the case, regardless of it’s merit, without enormous financial risk to himself. Thus a key point of leverage for RA was rendered impotent.
Cameron Clyne, who knows a lot more about running a business than most, having been Managing Director of the National Australia Bank from 2009 – 2014, told Fordham: “Let me just talk about why we settled. The first thing I want to knock off is that this will have not one impact on community rugby, we’re emphatic about that. We did not want to have a situation whereby prolonging this case and paying legal fees, if we were going to damage community rugby. The only reason we settled was we got to a number with Israel Folau’s side where it was cheaper for us to settle than to continue to run the case. He had an opportunity to have his case funded by external parties, we did not.”
To my mind, Clyne’s version of events represents a prudent course of action that any sensible board would have taken.
I learnt this the hard way many years ago when I was a partner in a small company and we had a client who refused to pay for services rendered. We sued them for $70,000 which is what we reckoned they owed us. Technically, we won the case. The judge awarded us $30,000 and, as importantly, 75 per cent of the costs of running the case, which came to around $50,000 all up for both parties. This meant that out of our 30k we had to give up $12,500, which left us a “whopping” $17,500 for our troubles.
Still, we were winners, right? No, not when you consider the distraction that this case posed for our little company, and me personally. Over a two-year period, the time allocated to dealing with lawyers, gathering evidence, developing a strategy etc, could have been spent far more productively growing the business
And here’s the kicker. The defendant had to pay a total of $67,500 (including damages to us and their share of costs) but was deemed to have no capacity to pay in a lump sum, so the court ordered they pay it off at $400 per month. Thanks for nothing.
It was a Pyrrhic victory at best. It was an outcome we didn’t expect. It could have turned out much worse. In hindsight, we took a huge gamble we should never have taken.
My friends in the legal profession tell me that much of their litigation business stems from a human condition, often found in testosterone fuelled males, called hubris. In general, people think they make rational decisions. They don’t. Hence the saying, “A person who represents themselves has a fool for a client.” That’s why they hire lawyers.
Good lawyers try to discourage their clients from going to court, especially where there is a likelihood that it will cost considerably more to win the case than the value of any payout they may receive.
Yet, despite their warnings, as often as not, the client is just itching to say to their opponent, “I’ll see you in court,” convinced that the judge will give them the dressing down they deserve to teach them a lesson. Such an outcome, though, is rarely achieved.
RA’s position with Folau is made far more complex than my example because there are so many stakeholders and vested interests at play.
In the prestigious sports publication The ROAR, (which was just this week sold by owner ARN to AthletesVoice) a man knows a lot more about Rugby than I, Geoff Parkes wrote an informative article titled: Why everyone got it wrong about Rugby Australia and Israel Folau. It is seriously worth a read.
In it, he lists six categories of people with vested interests in seeing this case go to trial.
1. Those seeking to affirm the right of religious free speech in Australia;
2. Those with an existing anti-Rugby Australia agenda,
3. Those who wanted a test case run through the courts with respect to the rights of an employer versus the rights of an employee
4. Those with a vested interest in rugby’s broadcast rights;
5. Those who supported Rugby Australia’s stand against Folau
6. And a generally ill-informed commentariat, comprising talk-back radio hosts, TV commentators, general print and digital commentators, who are paid to provide opinions, regardless of their specific expertise on any particular topic.
While those in the above groups may feel robbed of the opportunity to prove their point at trial, they are expecting RA to use its own money to fund their case while they get a free ride. At least the religious group headed by the Australian Christian Lobby and its supporters put their money where their mouths are and stumped up $2 million for Folau’s legal costs – which means that Folau has nothing to lose except other people’s money and everything to gain by fighting RA.
As Geoff Parkes (left) puts it, one of the failures of all of those hailing Folau as victor over Rugby Australia is “an inability to adopt the point of view of Rugby Australia who, after all, are the party actually involved and who, unlike everyone else, have real money at stake, and who are obliged to manage the matter for the betterment of their rugby constituency.”
So, now put yourself in RA’s position. Folau has an enormous fighting fund of $2 million that the Christians would no doubt happily top up to whatever it takes for him to win. RA, has a game to run and a community Rugby initiative to finance. The ongoing distraction that this case has caused has so far cost the game dearly in both coin and reputation.
The prudent, rational thing for a board to do in such a situation is to cut its losses and move on, not double down in a fit of hubris. All RA need to do then is concentrate on the Wallabies winning a few matches and all will be forgotten like Australian Cricket’s ball tampering incident – whenever that was.
Peter Saxon