As PGA Championship wrapped, PGA Tour board suffered another blow
A PGA Tour flag.
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While Xander Schauffele was shaking hands and posing for an endless stream of photos in the aftermath of his rousing PGA Championship victory, more unsettling news arrived for the PGA Tour. Yet another Policy Board member had resigned.
Mark Flaherty, one of the independent directors who works with Tour players to enact bylaws and set up the Tour for success, issued a resignation statement Sunday evening, effective immediately. Flaherty, a Goldman Sachs director, served in that role for more than four years, but now leaves a significant void in his departure. The timing is ominous.
Flaherty’s resignation comes just six days after that of Jimmy Dunne, bookending the PGA Championship with disruptive Tour news. Dunne’s resignation came in response to “no meaningful progress” being made in the Tour’s negotiations with the Saudi Public Investment Fund, the owners of LIV Golf. Flaherty’s letter was complimentary of Tour commissioner Jay Monahan and board director Ed Herlihy, but notably did not mention the six player directors on the board.
Dunne called his role, “utterly superfluous” last week, in part because player directors now outnumbered independent directors. Tiger Woods, Patrick Cantlay, Jordan Spieth, Peter Malnati, Webb Simpson and Adam Scott is a group of six. Dunne’s departure left just four non-players. Flaherty’s departure now leaves just three: Herlihy, Mary Meeker and Joe Gorder. Herlihy is the board chairman, while Gorder is the newly appointed chairman of PGA Tour Enterprises, the for-profit entity that received a $1.5 billion investment in January from Strategic Sports Group.
Tour fans would be right to be confused by the unrest. The Policy Board is not meant to seem like a game of musical chairs. Player directors are brought on for three-year, fixed terms. After three years on the board, they are replaced by the chairman of the Player Advisory Council, which fields concerns from players and elevates them to the board.
Despite its established structure, the board has had few months of consistency over the past year. It was 12 months ago that Herlihy and Dunne were holding secret meetings with the PIF without the rest of the board’s, or the Tour membership’s, knowledge. Within two months of both sides signing a Framework Agreement — a deal to negotiate a deal — two major changes took place. First, Randall Stephenson, the former AT&T CEO, resigned after 12 years in his post, saying a deal with the PIF was not something he “could in good conscience support.”
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Then, in late July, Tiger Woods assumed an additional board position after 41 of the game’s top players signed a letter and sent it to commissioner Monahan in the middle of the night demanding Woods have a seat. They wanted a more significant voice in the room, and no voice is louder than Woods’. They also wanted to flip the arithmetic, to make sure the board had as many player votes as non-player votes. They got their wish, but now months later it has been met by a decay of involvement from independent directors.
There are plenty of reasons for the board to be structured with equal balance. The best golfers in the world are great at being exactly that, golfers. They know, better than anyone, what works best for them when it comes to their trade. The independent directors are some of the most savvy business leaders in America. Some of them deal with mergers and acquisitions, in negotiations, in legal work, brokering sponsorships, etc. Their insights are a worthy balance against the shortcomings any elite athletes might have in their collective C/Vs. Not to mention their availability. We’ve seen Woods, Rory McIlroy, Adam Scott and other players note how many Zoom meetings they’ve attended from different time zones and odd hours of the night to make progress as a unit.
“If you ask any of the player directors, we just don’t sleep much,” Woods said after missing the cut this week.
In recent weeks, the Policy Board has come sharply into view, given Webb Simpson wanted to resign his seat but only if McIlroy were permitted to take it from him. Simpson’s term ends at the end of 2025, and McIlroy was happy to accept. Unfortunately for both, “there was a subset of people on the board that were maybe uncomfortable with me coming back on for some reason,” McIlroy said at the Wells Fargo Championship two weeks ago.
Even if two well-intentioned pros wanted to swap spots, the governance of board positions don’t allow for a transaction so simple. The remaining board members would first have to vote on the matter, a fact McIlroy should know better than most, given he resigned from the board in November, making way for there to be a unanimous vote in favor of Jordan Spieth taking his spot. When the news of the McIlroy denial was shared, Commissioner Monahan jumped into action, clarifying in a statement, “Today’s news is in no way a commentary on Rory’s important perspective and influence. It’s simply a matter of adherence to our governance process by which a Tour player becomes a Board member.”
Add it all up and every meeting the board holds looks different every time they get together. For an entity that has maintained its same shape for years entering 2023, all of the movement continues to feel abnormal. McIlroy’s denial. Dunne’s resignation. Flaherty’s, too. It’s certainly wearing down some of those involved.
“I would say my confidence level on something getting done before last week was, you know, as low as it had been,” McIlroy said during the PGA Championship. “And then with this news of Jimmy resigning and knowing the relationship he has with the other side, and how much warmth there is from the other side, it’s concerning.”
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