FIFA – could it happen to you?

The recent FIFA scandal should serve as a warning to all sports bodies. Sport will always be a target for fraud and corruption, so governance processes need to be up to the challenge.  

Sport will always attract headlines – due to the often huge sums of money involved, the charisma of sports stars and the passion of fans. “This means the lay person is a lot more interested in the activities of sports bodies than the affairs of most companies,” says Moore Stephens associate John Baker, an expert in countering fraud and corruption. “Sports bodies could be doing a lot more to improve the perception and the reality of how they reduce their fraud and corruption risk, and so boost their reputation. The public eye is upon them, so it’s important to get their house in order.”

The European Commission (EC) is also interested in tackling corruption. A 2012 study commissioned by the EC looked at match-fixing in sport and the various criminal law provisions that exist across Europe. “There is interest in creating an international legal framework to drive out levels of corruption,” John says.

Multiple challenges

One of the challenges for sports bodies is that fraud and corruption can take many forms, from ticketing fraud and selling fake branded merchandise, through to match fixing and rigging. Those conducting the fraud can be one-man bands, or more sophisticated criminal organisations. Another challenge is that many sports are associated with gifts and hospitality, which can sometimes be lavish. Establishing a clear line between acceptable behaviour and bribery can be difficult. “There may be cultural challenges too,” John says. “Sport is about winning, taking risks. Could those attitudes extend into the culture and governance of a sports organisation?”

Establishing sound governance processes is vitally important – but can easily be overlooked. “Those involved in sport, participants and fans, aren’t usually driven by money,” John says. “They are driven by their love of the actual sport. So governance can sometimes take second place. But it’s vital that board members in sports bodies take a step back and look again at their fraud, bribery and corruption risks – at strategic and operational levels. What threats do they face? In sport, particularly with major events, the focus is often on terrorism, but it’s important to address bribery and fraud risk as well.”

Elements of sound governance

The first line of defence against fraud lies in the culture set by the board. “Sports bodies need to make sure that they have anti-fraud and bribery policies in place, and that they set them out clearly,” John says. “They need to state that fraud and corruption won’t be tolerated, and give a robust message from the top. Some organisation, such as UK Sport, set out very clear anti-fraud and anti-corruption statements on their websites. This is good – it’s setting the tone from the top. The challenge then is to cascade this through the organisation and on to club level.”

Encouraging sports stars to make public statements against match fixing and other fraudulent activities could also boost the anti-fraud message and culture. “They could be more powerful role models than boards and non-executive directors who nobody recognises,” John says.

Sound governance also includes ‘whistle blowing’ procedures. “Staff need to be equipped and trained to recognise signs of fraud and corruption,” John says. “They also need to be in a position to raise any concerns without fearing for their own position. There’s room for improvement here in most bodies, including sport.”

For any advice on your own anti-fraud and bribery policies and procedures, please get in touch.


John Baker