The governance issues at Manchester United

The governance issues at Manchester United need a thorough analysis; they’ve certainly gone on for long enough to deserve one. 

Problems have been recurring in the inner workings of this – one of the world’s most famous teams – for a decade, all the while turning the focus away from football and towards leadership battles that land the club with repeated news headlines for all the wrong reasons. 

Underneath the rhetoric, we have a governance architecture that is seriously fractured. It makes for more of a colossal failure when you consider just how many stakeholders the club has across the world, most of them committed fans who are now as used to reading more about their team’s corporate problems as they are fortunes on the pitch.

Known for consistent on-field success across decades of top-level English football, last year, the club achieved its worst Premier League result (15th) since the mid-1970s. This year, and at the time of writing, they are sitting at 7th place and have just seen their most recent manager, Ruben Amorim, leave his post. He was only in the job for 14 months. 

In times like this, as has happened before, the troubles on the pitch bring the club’s governance directly into the spotlight. They expose what many critics dismiss as a flawed system that prioritises other issues over sporting excellence. 

Currently, Manchester United uses a “hybrid” governance experiment whereby day-to-day power over football-related issues rests with Jim Ratcliffe, who owns a minority stake of 29% through his petrochemical and sporting company INEOS. 

For years, the club’s decisions fell more to the infamous pairing of co-executive chairs Avram and Joel Glazer. Still, repeated criticism has seen them relinquish much of this to Ratcliffe and his new management apparatus. 

That said, the Glazers remain majority shareholders and their sign-off is required for all big decisions. 

It was a new leadership model meant to inspire confidence at a bleak time for the club. So far, it hasn’t panned out that way.

To understand the crisis, we have to look at the pillars of dysfunction that have plagued the team. Some of them go back years, yet we still need to mention them here because they have contributed to a structure and culture that could easily take an equally long time to solve.

Most critics will argue that a lot of United’s governance problems go back to its leveraged buyout by Malcolm Glazer in 2005. This defining moment introduced significant debt to the club, which, since then, has functioned as little more than a channel for revenue. This continues to cause consternation among fans, journalists and other stakeholders, who view the club as a means for owners to acquire wealth, and not to funnel money back to developing players and improving infrastructure.

The 2024 arrangement, which handed more day-to-day power to Ratcliffe while scaling back the Glazers’ influence, hasn’t yielded results thus far. There are still clear and serious doubts over team management and its performance. So far, the hybrid model has only added to those problems. It has created an internal power struggle at the leadership levels, which any corporate governance professional will tell you is an immediate red flag. 

Having separate responsibilities among key figures is fine, as long as there are processes in place for what happens in disagreements, shaped by strategy rather than ego.

In the wake of Amorim’s departure, the media piled attention onto United’s corporate culture – something that will usually take years to build yet can be undone so easily. Writing for a national broadcaster, one psychology expert said that the club had been reduced to a “textbook example of a toxic workplace.”

What are the signs? Power struggles at the top, poor levels of motivation and performance, persistent levels of criticism with little done to address any concerns, and a belief that the central apparatus of the club exists only to serve a small number of people, which is especially damaging considering the number of stakeholders the club has worldwide. 

Issues like this begin at the top. If they don’t, then the top are definitely responsible for breathing more life into them. 

While many organisations with bad press don’t often receive it for culture at first, subsequent investigations, op-eds, and whistleblower revelations will usually point to culture as a root cause of governance nightmares. It’s no different here.

It goes without saying that if Manchester United is to change its fortunes, the main results will be seen on the pitch. That said, an uptick in team performance will likely depend on a lot of work behind the scenes. 

• The ownership structure: This is definitely the biggest hurdle. The club has obviously taken steps to alter this structure after years under the Glazers, but that hybrid model, so far, has not delivered. It has only created a tug-of-war among key personnel, which is a corporate governance nightmare. Healthy and respectful disagreements at the top are okay, and often necessary for a healthy, functioning governance apparatus. Standoffs over decision-making and confidence are not OK. There are signs that the ownership structure needs to shift to something more focused, more dedicated to sporting success as a condition of financial success. 
• Speaking of sporting success: Results don’t lie: We’ve seen years where United’s strategy seems to be more about the brand and the revenue than it is about sporting success. While that might have produced short-term results once upon a time, it is not a recipe for long-term survival, and so it has to change. In this case, however, the trouble could easily be convincing the club’s leaders of the necessity. The group-think around the table has spent years in a mindset of finance and return.
• Stakeholder reconnection: If the culture is to change, two groups of stakeholders which must be part of it are the players and the fans. The players have been repeatedly blasted in the media, sometimes by senior United personnel, and no matter what industry you’re in, this will not light a fire as much as it will rob the team of motivation. Meanwhile, while United has made an effort to connect more with fans through a Fan Advisory Board (FAB), this group has limited access to key figures like Ratcliffe and the Glazers, nor does it enjoy any voting rights. Taking steps to remedy this would go a long way to demonstrate that the club is serious about changing culture.