PART II: Present Governance and Regulation of British Greyhound Racing

Chapter 6

THE INDEPENDENCE AND ACCOUNTABILITY OF THE REGULATOR

Introduction

The question of the independence of the present NGRC and of the independence of the regulatory process in greyhound racing, past, present and future, has recurred through much of the evidence submitted to this Review - not always with agreement among witnesses. The independence issue was wryly summed up by one senior officer of the NGRC: 'The Government and the welfare agencies want an effective regulator, the Club and the bookmakers want an independent regulator, while the promoters on the Board want to control a cosmetic regulator'. What is clear is that the degree of independence given to any future regulatory arm, whether conducted by the NGRC or, as we propose, by a new body, will be critical to its role, its effectiveness and its acceptance by the industry, by the government and by the public.

The Need for Independence

This Review starts from the presumption, in common with much of modern good governance, that effective regulation requires that the regulator enjoys a considerable degree of independence from the regulated. The questions which face us are how much independence the Regulator should have, over which areas of the sport, and how that independence should be balanced with accountability - and to whom.

Clearly regulation cannot be guaranteed to be enforced effectively, fairly and consistently if the regulated (in greyhounds' case mainly the promoters, owners and trainers) have power over the regulators. The NGRC has repeatedly made that point to this Review, claiming that in fact too often in greyhound racing the commercial interests have over-ridden regulatory independence. Other witnesses, including vets and welfare groups, have broadly supported this view.

The Club complains in its evidence that its independence is compromised in principle and in frequent practice by its need for funding from those it regulates and by its subservience to the commercial operators on the Board. It argues that it cannot properly enforce welfare standards: partly because of lack of sufficient funding and also because those promoters wishing to avoid meeting welfare standards are in positions of authority on the Board and at the tracks to oppose the introduction and implementation of necessary rules. The Club also claims that the track vets, at the sharp end of the integrity and welfare of the racing dogs, are actually employed by the promoters and are sometimes intimidated by them so they cannot independently enforce the rules.

The Society of Greyhound Veterinarians in its evidence agrees broadly with this aspect of the Club's complaint. They argue that 'The NGRC has already found itself threatened with non-payment of grants and license fees when attempting to enforce decisions that were unpopular with the promoters. It is the opinion of the SGV that the financial dependency of the NGRC on the BGRB and the promoters is not in the best interests of the open governance of the industry and must cease.' They cite instances where welfare and integrity have allegedly been subordinated to the commercial priorities of the promoters. The vets state unequivocally that 'the regulatory body must be totally independent' and that such independence is essential 'in order that the welfare of the greyhound is protected'. They assert that 'whatever regulatory structure is imposed upon the sport, it is axiomatic that it must have sufficient independent secure financial support to function effectively and transparently'. Supporting this view, one individual commentator pointed out that 'down the years where the promoters take exception to NGRC policy, they threaten to (and recently have) kick out the Senior Steward…. The independence of the NGRC is tenuous mainly because of its funding mechanism'. The SGV and other vets individually argued to us that track vets should be employed and paid independently so that the promoters cannot influence them. (We discuss this issue below in chapter 15).

The Need for Balance

This Review accepts that historically the independence of the NGRC has at times been obstructed and compromised by the elevation of commercial priorities above regulatory priorities. But it is not always an easy task to balance the two. Greyhound racing is a commercial sport under severe financial pressure. It must seek the highest regulatory standards - not least because racing integrity is a great commercial asset. At the same time it cannot ignore the commercial priorities on which its financial future depends. A difficult balance between commercial and regulatory (including welfare) priorities must be achieved. What is clear is that in the past there has been an unequal balance of power between the governing and the regulatory sides of the sport, to the detriment of the regulatory arm.

However it should be noted that some of the wilder allegations of 'promoter control' of the Board and, through it, excessive dominance over the industry, though correct about much of the history of the sport, are now to some extent exaggerated and out of date. The reforms introduced since 2004 and supported by progressive commercial operators, have recently reduced the power of the promoters on the Board and introduced more independent directors. There is now not a majority of promoters on the Board nor on its more important committees. Even so, the promoters have a dominant 'voice' and it may be questioned whether a satisfactory balance of power has yet been established - or indeed whether it can be with the present separate bodies which constitute the governing and regulatory structure, especially given their history of mutual animosity and the lack of trust and confidence persisting between the two sides. That is one reason why a more radical restructuring may be necessary, as discussed below in Chapter 9.

The Promoters & Trainers

While considering the issue of regulatory independence, especially for a newly structured regulator, it should be noted that the promoters - the most powerful economic driver in the greyhound industry, who historically dominated the Board - submitted striking evidence rejecting the case for a more independent regulator. Indeed they argue for a major reduction in the regulator's role and the breadth of its authority, asserting that its authority should be confined to only the functions of central judicial enquiries (to be operated by five stewards and one and a half clerks). They claim, somewhat ambitiously, that the rest of the normal regulatory functions (rule-making and changing, licensing, registration, welfare etc) should be controlled by the industry stakeholders on the Board - ie by themselves who do the financing.

Clearly the promoters have a restricted concept of regulatory independence, stating starkly that 'the regulator does not need independence, it needs expertise'. The only independence which they concede is an 'independent judgment of alleged breaches of Rules of Racing and independent application of penalties where….considered proven'. They accept that the sport's judiciary should be 'independent in career background and independently financed'. Beyond that restricted, but important, judicial role and a limited concept of independence, the promoters see the rest of regulation as being under the authority of the Board - though it would be an altered Board, with three independent directors, three practitioners and four promoters. The trainers' representatives broadly agreed with this position, one of them stating brutally that the regulators should exercise just the judicial function and apart from that 'should do what they are told to do by the stakeholders on the Board'.

These strong views of the promoters and the trainers have to be seriously considered since they are the commercial heart of the industry and constitute the core of those regulated by the regulator. However, no other witnesses (not even the Board which these promoters are said to control) took this limited view of regulatory independence. The majority of other witnesses sought greater authority and independence for the regulatory arm, while often feeling that the present Club lacks the credibility to be that arm. But it should be conceded that the promoters do present a coherent case for thus limiting independent regulation to the judicial function and leaving the rest of regulation to a Board which contains both a stakeholder and an independent element. They argue that greyhound racing is a small industry and does not need big, costly and complex regulation. They draw a fundamental distinction between judicial regulation, which must be totally independent, and operational regulation, which they see as a process which needs expertise and not independence. They assert that in a small self-regulated sport there is no need for strong independence; what is needed is the 'buy-in' by stakeholders to support regulation, which they claim is best achieved by involving the stakeholders in actually conducting the regulatory process. They fear that 'independence', especially if conducted by 'outsiders' (eg in their eyes some welfare groups), will be more likely to produce conflict and hostility, without consistency or the knowledge necessary to apply regulation in a practical way.

Their prime concern is to 'look for the best way to make the sport work commercially'. They are afraid that an extensive regulatory arm which is strongly independent would obstruct the commercial needs of the industry from a position of ignorance and so threaten its commercial viability and very existence at a time when it is anyway suffering financial decline.

This argument from the people who provide the arena for the sport and hopefully will invest in its future cannot be dismissed out of hand - though that would probably be the instant reaction of some of the welfare lobby. The promoters' position has an impressively practical flavour. That valuable dimension of practicality can be incorporated into our proposed new model for the industry, where the promoters' fears of alien, ignorant and impractical regulation can hopefully be allayed. But in principle their view seems to offer an unnecessarily limited vision of the desirable responsibility and degree of independence of the regulatory arm and runs counter to much of modern views of good governance. Regulation can be 'independent' where appropriate but also be held accountable and subject to consultation with those having practical knowledge and holding commercial responsibility. That is what this Review seeks to achieve.

Accountability

The promoters and the Board also make valid points in relation to the necessary accountability and transparency of the regulatory arm. They argue, from much experience, that the NGRC has often resisted being held sufficiently accountable, operating historically as a self-appointed body accountable to no-one. They point out that currently there is no clearly established mechanism for handling complaints about the regulatory conduct of the Club and that all such complaints are handled internally, with no independent scrutiny. Thus, it is alleged, the Club which demands its right to scrutinise independently the conduct of greyhound racing's practitioners, does not allow such independent scrutiny of itself.

On the general principle of the accountability of the Regulator, this Review, while supporting greater regulatory independence where clearly appropriate, does not accept that the Regulator - whether the Club or a new regulatory arm - can expect to have unaccountable authority. Independence does not mean that a regulator can do what, when and how it likes, regardless of costs and the views of others in the industry. Regulating independently does not mean acting wholly independently of the greyhound racing industry. For example, it is not practical in a commercial sport to allow regulators to introduce and prosecute whatever rules and practices they choose without consultation with those effected, without due prior warning and regardless of the cost or practicality of rule changes. There has to be due consultation and a reasonable and mutually agreed degree of accountability of the regulator to the practitioners who create and pay for the sport, as well as to the governing body and, in a broader sense, to the public which follows it.

Accountability vs Independence

The regulator should of course be independent in the day to day discharge of its licensing, welfare, policing and judicial functions and also in proposing rules and rule changes - though it should obtain consent from the governing Board for rule changes which have major organisational, financial or practical implications, and should give practitioners reasonable notice of changes which affect them and their work. The NGRC evidence appeared to concede only very limited accountability and claimed that, as regulator, the NGRC is ultimately accountable only to the law for its actions. That Club view may at times seem as extreme in its proclamation of unaccountable independence as promoters are in arguing that most of regulation should come under a Board where the commercial operators have at least the strongest voice. It is not surprising that the two sides have found difficulty in working together consensually.

It must be admitted, however, that the lines between necessary accountability and necessary independence are sometimes difficult to draw. The challenge for the future of greyhound racing is to establish a proper balance of power and accountability between the regulator and the regulated. Through that balance, the regulator should have the maximum independence compatible with necessary accountability, but not unaccountable licence. The regulated should not have power over the regulator; but nor should the regulator be unaccountable to the regulated. Achieving that balance has so far proved beyond the current governing and regulatory bodies

Conclusion

This Review concludes that the NGRC has in the past enjoyed insufficient independence in its conduct of regulation. The central priorities of that regulation have at times been subordinated to the commercial priorities of an industry under the remorseless financial pressures of decline. The desirable balance of power already described has not always been achieved. One objective of this Review is to readjust that balance and to reinforce the genuine independence of the regulatory arm in those areas where such independence is appropriate and crucial to good regulation.

It is encouraging that the present Government, the bookmakers, the welfare agencies and several of the more enlightened promoters have explicitly supported or have indicated a willingness to accept such a rebalancing of power. An important part of that process could of course be the introduction of a greater proportion of independence into the governing body to whom the regulatory function would be accountable. That is described in greater detail below in chapter 9.

But it should also be recognised that a significant degree of accountability and transparency by the regulator is required in the modern world. The Club sadly has not always acknowledged that reality. Below are suggestions for a new governing structure which might ensure such an objective, with greater independence and due accountability, and which would promise to give greater satisfaction both to those being regulated for the sport's integrity and to the wider public increasingly concerned with greyhound welfare.