The Essendon Football Club has apologised to former CEO Andrew Thorburn over the way it handled the events leading to his departure after just one day in the role.
Mr Thorburn was appointed as the Bombers CEO in October, but resigned a day later after public commentary over his involvement in a church which had shared controversial views about homosexuality and abortion.
Mr Thorburn said at the time it was clear to him that his personal Christian faith was "not tolerated or permitted in the public square", despite his leadership record.
In a joint statement released on Tuesday, the two parties said they had resolved the dispute over the matter and would work to "enable a wider community conversation on the importance of freedom of conscience, religion and belief".
Essendon Football Club said it acknowledged "that the events of October should have been handled better and apologises for the impact it had on Mr Thorburn, his family and others".
"Both parties consider that elements of the public commentary at the time were extreme and wrong and counter-productive to the respectful community dialogue they agree is critical," the statement said.
"Mr Thorburn remains welcome at the Club. The Club reiterates that he is a person of integrity who treats others, whether at work or elsewhere, with dignity and respect.
"He has a strong track record of leadership including with respect to diversity and inclusion of LGBTIQ and other minority groups."
The statement noted genuine diversity should include people of faith and "everyone should be able to openly express their personal position, in a respectful way, without fear and still feel that they belong".
As part of the dispute resolution, the Essendon Football Club will make a donation to an ethics institute to prepare a paper on how sporting organisations can build "inclusive communities recognising freedoms including those relating to race, religion and sexuality".
The statement did not specify which institute would be funded to prepare the paper.
