[5] On appointing Penney, Munster rugby CEO Garrett Fitzgerald said; "We conducted a thorough search to find a replacement for Tony McGahan and were delighted with the calibre of the candidates".
[6][7] Penney took charge of his first competitive game as Munster coach on 1 September 2012, in a Rabo Direct Pro 12 match against Edinburgh Rugby at Murrayfield.
[9][10] Penney's Munster side had a surprise loss in the 2012–13 Heineken Cup on 13 October 2012, when they threw away an early lead against Racing Métro 92 and lost the game 22–17, but crucially secured a losing bonus point.
Munster got their campaign back on track against Edinburgh Rugby the next week with a bonus point victory, winning 33–0 on the day and leaving themselves in a strong position to get out of the group stages.
[18] The Japanese Top League team NTT Communications Shining Arcs announced Penney as their new head coach for the next season on 11 April 2014.
[20][21] On 28 March 2021, the Waratahs sacked Penney as head coach after a struggling 0–5 start to the 2021 Super Rugby AU season.