Sports Governance: what does good look like and are sports governing bodies doomed to fail?

GoodCorporation’s first Business Ethics Debate of 2016 began with the suggestion that sport’s governing bodies are doomed to fail in terms of ethical governance. Shaila-Ann Rao, former CEO of Sportfive International introduced the debate with an outline of the reasons why governance is failing in sport.

1. Sporting ideals of team spirit, fair play and participation govern our perception of sport and those who participate in it. Consequently there has been:

• A desire to protect the ideal by failing to acknowledge or confront any wrongdoing or hold those responsible for misconduct to account.
• A tendency to place sport on a pedestal; an institution beyond reproach.

2. Governance structures of sporting bodies can lack appropriate controls and sanctions, consequently:

• Many sporting bodies struggle to identify and manage corruption and wrongdoing, particularly that which may occur within their own executive or on the business side of the organisations.
• Ethics committees tend to focus on the behaviour of players and are not properly geared up to identify and sanction any misconduct within the governing body itself.
• There is a lack of financial accountability so conflicts of interest exist with associations and federations focusing increasingly on revenue, while also offering bonuses to senior executives based on revenue generation.

3. Sports personalities: a number of reasons were given why the preponderance of former sporting champions in governing bodies can be problematic:

• The possible involvement of those prepared to win at any cost and engage in corrupt activities.
• A lack of desire to challenge sporting heroes within sports organisations.
• A lack of management training and business experience that can make them vulnerable to unscrupulous intermediaries or naïve of corrupt practices.

4. Purpose and mission: The principle mission of governing bodies is to develop their sport and encourage participation. This has resulted in:

• Regulation focussed on the sport rather than the organisation and the business activities it is engaged in such as sponsorship, media rights, marketing and merchandising.
• A failure to adopt the systems and controls that govern good practice meaning governing bodies lag behind corporates.
• No shareholder equivalent to hold the organisation to account.

5. Reaction of Governments

• Governments have tended to consider it a privilege to host sport governing bodies and do not see their role as regulators despite allegations (Fifa being the most extreme example).
• Presidents of high-profile sporting bodies are treated as royalty/heads of state, as if they are beyond reproach.
• A lack of courage to demand accountability.

In the debate, few agreed that governing bodies are doomed to fail. Those that did cited the following reasons:

• A lack of proper law enforcement to properly tackle those that do wrong through meaningful sanctions.
• A failure by law enforcement to treat some misconduct seriously e.g. match-fixing.
• A lack of strong governance and proper oversight that will ensure an organisation will do the right thing even when put to the test.
• The conflict between promoting sport on the one hand versus publicly tackling potentially damaging problems or scandals.
• A lack of strong leaders/individuals who are prepared to hold personalities and/or institutions to account.

Most felt that while sport is currently caught in the headlights, this is a transition phase and failure is not inevitable. There was confidence that the passion and enthusiasm for sport can drive change for the better. Success needs to embrace the following:

• A move away from sports professionals at the helm.
• Recognition that sports federations and associations are also businesses and need to adopt the same checks and balances as corporates.
• Establishing accountability by putting controls in place to maintain high standards effectively.
• Appointing leaders who will drive change rather than opting for a ‘safe pair of hands’ who will not rock the boat.
• A clear separation of the governing body from the commercial arm of the organisation.
• Strong disciplinary action imposing tough sanctions and penalties for misconduct.
• Separate investigation units that conduct independent reviews of misconduct or allegations of misconduct – the Tennis Integrity Unit was cited as a good example.
• Greater transparency of the organisation’s activities including commercial operations as well as the staging and awarding of events.
• Move the headquarters out of tax havens that promote financial secrecy.
• The implementation of whistleblowing or speak up systems to provide a means by which concerns can be raised and dealt with.
• Greater empowerment of those lower down the organisation to promote change from the bottom up as well as the top down.
• Ensure greater diversity among the leadership – involving those that might care less about the sport can in fact protect it, as they would be prepared to tackle the sporting heroes who had gone astray.

The GoodCorporation View

The governance structures of the sport need to be clearly established and properly constituted, supported by a code of ethics and with a compliance team to ensure enforcement. There should be clear reporting lines and clear accountability for board members as well as officials. These core governance structures should be regularly reviewed.

Sports organisations should act transparently, aiming to report and publish information about their activities openly and widely.

Integrity in sport is vital and should be at the heart of the mission of sports bodies, ensuring fair play we well as the avoidance of cheating and taking performance enhancing drugs. Sports should be using participation as a way to promote non-discrimination, the protection of children and vulnerable adults as well as creating community cohesion and a positive legacy.

The management of media and events marketing rights are crucial if sport is to be made more transparent. Procedures are needed to ensure that rights are awarded fairly and monies distributed correctly and transparently.

These commitments must be translated in turn to all member organisations and affiliated bodies worldwide and supported by strong finance, procurement and HR controls. Finally all of these issues require active monitoring and review to ensure that sporting bodies achieve and maintain the highest levels of integrity.

GoodCorporation’s Sports Governance Framework can assist federations, associations, clubs and governing bodies with the development of appropriate governance and management structures needed to embed good practice throughout their organisations.

Access our Framework here.