South African rugby is a step closer to having a more streamlined and cost-effective controlling body.

This follows the announcement that the President's Council of the South African Rugby Union (SARU) unanimously decided on Thursday to recommend that the organisation convert to a Section 21 company.

Oregan Hoskins, the SARU President, reaffirmed that the decision had been taken to streamline rugby administration and respond to a change in approach to the tax status of sporting bodies by the South African Revenue Service.

A Section 21 company is a not-for-profit association of members.

If the decision is ratified, it will have the effect of dissolving SARU and converting SA Rugby (Pty) Ltd (currently the commercial arm of SARU) into a Section 21 company.

A new Board will replace the existing President's Council and the Board of SA Rugby (Pty) Ltd.

"This was a very important decision that will simplify the governance of South African rugby," said Hoskins.

"We will be consulting with all our stakeholders — players, sponsors and broadcasters — to make sure that we canvas as widely as possible on our future structure.

"But the point is that this is a major step forward that all the provinces have bought into and will have major benefits for our rugby."

A panel of governance experts has been commissioned to draw up documents detailing the establishment of the new entity for discussion by members of the President's Council.

The intention is to have the new structure in operation on 1 January, 2009.

365