Sport has recently spent far too much time on the front pages of the newspapers instead of the back. But governance and ethical issues involving governing bodies such as football’s FIFA and athletics’ IAAF, as well as individuals like tennis pro Maria Sharapova and boxer Manny Pacquiao, haven’t just generated headlines and damaged public perceptions of ethical standards in sport. They have also brought serious commercial consequences for those concerned through loss of sponsorship, and lasting financial impact due to the significant reputational damage.
Clubs are also affected, Sunderland being one example. The actions of an individual can always tarnish the brand, but even more so where there is a suggestion of associated poor governance.
Such cases show that there is a price to be paid for poor governance. The highest profile clubs and bodies who earn the ‘big money’ in sport may be able to pay that price, but their failings could have wider and highly damaging consequences. Many governing bodies, funded partners, clubs and associations across the UK are heavily dependent on the support of sponsors, financially and otherwise. If those sponsors become unwilling to invest in sport because of generalised governance concerns, the effect could be catastrophic.
The proactive response
The façade of good governance and ethics is no longer enough to placate stakeholders such as fans, sponsors, investors and local communities. Governing bodies and clubs at all levels, professional and amateur, must go out of their way to demonstrate good governance.
This can be done in a number of ways, including:
- undertaking periodic reviews of the effectiveness of the board;
- training members of the board and management team on matters of ethics and governance;
- conducting regular reviews of policies and procedures (including for whistleblowing) and refreshing these where necessary;
- ensuring the board has access to the right skills and includes members who are independent of the sport; and
- managing financial interests and potential conflicts, including making regular declarations.
There are examples of good practice that go relatively unnoticed, such as Fulham Football Club’s forward-thinking risk management initiative. The club arranged for someone to pose as an underage person who initiated social media communication with players. This learning exercise drew players’ attention to the risks of such contact, educating them on steps they should take if ever faced with similar circumstances in real life.
Changing political attitudes
There has long been political interest in improving governance standards in sport. Government has previously sought to achieve change through self-regulation, but we are now seeing a new approach. The recent strategy paper, Sporting Future – A New Strategy for an Active Nation, set out a requirement for a mandatory code of governance for funded sports – a new UK Sports Governance Code which must be implemented by September 2016. This sets a standard which professional clubs should also embrace.
It is no longer enough for the boards of sporting organisations to say they observe good governance: it has to be demonstrable. The time has come to walk the walk. The sponsors are watching…