World-renowned businessman Henry Engelhardt has warned the Welsh Rugby Union faces significant financial and reputational damage if its proposed governance changes aren't voted through at an extraordinary general meeting this Sunday.
Welsh rugby is close to rock bottom at the moment and in response the WRU has put forward a series of governance changes which it hopes will save the game from oblivion.
These proposals include an increase in the number of highly skilled independently-appointed people on the WRU board from three to six, and a reduction in the number of elected national or district members from eight to four. The WRU also wants to appoint an independent chair and increase the number of women on the board from one to at least five.
The aim is to revolutionise the Union's archaic governance structure and make it suitable for a modern £100m business in 2023.
Engelhardt is the billionaire co-founder and former chief executive of arguably Wales’ most successful business, Admiral, while he is also an independent non-executive director on the WRU board.
He is therefore well-placed to comment on the best way forward for Welsh rugby.
Speaking exclusively to WalesOnline, he is quick to stress this is a watershed moment for the game in this country.
"I think all of Welsh rugby is struggling in every respect from the community game, the pro game, and the national team," said Engelhardt.
"I do trace it back to the governance of the Welsh Rugby Union. For 125 years they've made subtle changes but nothing too drastic and now there's a tsunami of change at the door, and they've got to open the door.
"What surprises me, and I've said this when I went to some district meetings a couple of weeks ago, I am shocked that the community game, the people that actually vote on these things are not coming to us and saying we've got to change the governance because this isn't working.
"They are very receptive to the message of we need people who have experience.
"Some people say 'oh this is a £90million business' and I say rubbish this is a billion pound organisation - £90million turnover and £910million of goodwill.
"The clubs do not own Welsh rugby. The people of Wales and Welsh rugby fans around the world own Welsh rugby. We are stewards and we are caretakers. We are here to take care of Welsh rugby for them.
"It's a watershed moment and it's vitally important this gets voted through."
Welsh rugby has suffered huge reputational damage in recent months following accusations of bullying, misogyny, sexism, and racism.
It's treatment of women has come under sharp focus following a harrowing BBC documentary, with major sponsors threatening to turn their backs on the WRU.
Engelhardt is adamant it is crucial more women are elevated to the WRU board, and finds it unfathomable how anyone would vote against this.
"It's important for a lot of reasons," said the self-made billionaire.
"One, there is a picture to show. It's not just about the WRU.
"I promise you if the clubs vote against this on the 26th and you go on holidays somewhere this is going to be worldwide news.
"'Wales votes for sexism', that's what the headline will be. You'll go on holiday somewhere and people will look at you cockeyed.
"'You're from that sexist, racist country'. It's going to affect all the people of Wales, and it's not just about the WRU.
"We certainly need to show the world that we aren't some backwards, sexist nation by putting women on the board.
"Two, women on the board will bring a lot of different thinking and different ways of looking at the questions. They will be a huge help to the board."
Engelhardt also fears the financial consequences of voting against this proposal, which he says could see many clubs fall through.
"The financial consequences are huge," said the 65-year-old who originally hails from Chicago.
"That's why we've put it forward as we have because our sponsors are sitting there going 'you are on a very thin rope of probation'.
"If I'm a sponsor, why do I support the WRU? It's not game-changing for my business.
"It's not like some of these big businesses who sponsor the WRU are going to fold if they don't have their name on the stadium.
"They are doing it because it helps their brand awareness, and it's supposed to be a benefit by association with the WRU and the stadium.
"The minute that flips over they say forget it. This is not only not good for us, it's bad for us.
"Imagine telling a company we can give you some really negative publicity, would you like that? It will cost you £10million.
"'Oh sure let's go for it'. Nobody is going to do that!
"The repercussions both on the reputation if we lose the sponsors and the actual money would be catastrophic."
Welsh rugby is on its knees, with the national side suffering its worst Six Nations in years, while the regional game continues to struggle.
These proposed changes are seen by many as the best way to get the game back on the right track following a calamitous 18 months.
The only potential obstacle to positive change is the 282 member clubs, with the WRU needing 75% of them to vote in favour at the EGM on Sunday.
Historically, this has been the biggest stumbling block to progress, with just 65.4% of clubs voting for the creation of an independent chair at the WRU's annual general meeting last October, falling short of the 75% majority required.
For a long time it has been argued an archaic governance structure needs to be modernised in order to better suit a £90million turnover business, but many clubs have feared losing control.
Engelhardt dismissed these fears and is confident these proposals will benefit all of Welsh rugby, including the clubs.
"I asked one of the leading critics who runs a club himself, a lovely guy, but I said on a zero to 10 basis how do you see the community game right now, with zero being completely shambolic and 10 being the envy of all rugby-playing nations around the world?" he said.
"He gave it two out of 10. This is the governance that's giving you a two so why do you want more of that?
"What kind of control is that? What are you asking for? What does it mean? Why would you want more of something that gives you a two?
"As for control, most organisations in the business world, if you have a controlling interest in the company you stick one person on the board to watch over things.
"You know you have voting control. You don't need to dominate the board, not at all.
"The board is there to work for you and you don't need to have eight out of 12, and even then I'm hearing a lot of criticism.
"These guys are elected by the community game and then the community game is saying they aren't doing what we want. Why did you elect them in the first place then?
"The baseline control rests with the club."
Even though he hails from the United States, Engelhardt has lived in Cardiff for over 30 years.
His formal association with Welsh rugby dates back to 2010 when the FTSE 100 company famously became front of shirt sponsors to the Wales national side, and they remain a community partner to this day.
Engelhardt, who is involved with American baseball side the Chicago Cubs, believes every business needs different skillsets and perspectives on the board.
And he insists the WRU more than anybody are in desperate need of this, especially an independent chair.
"What does an experienced chair give you? Organises meetings well, uses the valuable time of the people on the board well," he said.
"I have all the time in the world for people on the board. They've worked so hard and they try so hard but they don't have the experience.
"I think during my 22 months on the board we've had five regular meetings and 49 ad hoc meetings.
The fans' Wales Six Nations verdict: Have your say
"That's not right, that's not how it should work. During some meetings we run out of time before really important issues get discussed.
"That's bad clock management. The other super important thing is that an experienced chair - and it's a difficult role because they have to be both a cheerleader for the national management team and the auditor of the national management team - they need to know how you hold the management team to account for what it's supposed to be doing and what it is doing.
"You need experience to do that. That is not something you can just wake up in the morning and say okay I can hold this team to account.
"Then we just need more variety. Right now we have people coming up from the community game on the board who are really good guys and they work awfully hard but they are very similar to each other.
"They aren't identical twins but there's a lot of similarities. We need people from different backgrounds, we need people with different experiences, we need people with more experience in running organisations, not just about business."
Let's hope Welsh rugby makes the right decision on Sunday.
READ MORE:
