The FAI’s recent travails have placed the issue of governance firmly at the top of the sport agenda. The Governance Review Group (GRG) report evidenced a ‘breakdown in trust, confidence and faith in the Association’, maintaining the spotlight on corporate governance at Abbotstown and this was again the focus of some discussion at their recent AGM.
The GRG correctly emphasised that governance is not an end in itself, but a means to an end – the fulfilment of the FAI’s purpose: to promote and develop the game in Ireland.
Far from being burdensome, good governance is an enabler of performance and sustainability, providing a framework and environment for effective decision making, consideration of stakeholders, and the creation of long-term value.
Sport has long resisted interference from outside. Yet even advocates of its autonomy accept that this comes with an obligation to uphold the highest standards of governance and ethical behaviour, to be accountable and transparent.
Sport in Ireland is now a business and a significant economic driver. Households spend €1.9 billion annually on sport and associated goods and services, with sport-related spending contributing €1.8 billion in value added to the economy. Jobs, livelihoods and investments hinge on performance on and off the field of play.
The sector now plays an expanded part in Irish life, performing roles in a range of policy initiatives, from health to social development and economic stimulation.
The governance of many sports bodies was not intended for this scale or multiplicity of functions.
The FAI now oversees 400,000 participants, an annual turnover of €50 million, over 200 employees (for now) and is involved in almost every community in Ireland. Its responsibilities cover both football matters and commercial interests. Yet, its structures and governance practices have progressed little. Its problems reflect a twenty-first century operation run on an outdated governance model.
Robust governance in sports bodies is increasingly demanded by external partners.
The commitment of €32 million of Government money for 2019 must be protected. Hence, compliance with the Community, Voluntary and Charitable Organisations Governance Code is a condition of funding. A similar approach in the UK saw the Football Association face the prospect of losing £30 million. Though a tenth of that sum, the suspended public investment in the FAI is critical to the Association’s finances.
Reservations expressed by Three Ireland and SSE Airtricity about the FAI’s arrangements illustrate that commercial sponsors expect to see sophisticated governance and integrity structures replicated in sports partners. When in 2015 FIFA lost Sony, Emirates and Castrol, none cited the corruption scandals, but the timing seemed significant. Transgressions in Cape Town cost Cricket Australia a deal worth AUS$20 million with Magellan, a wealth management company, the implicated players lucrative contracts, and huge reputational damage.
Though central to its recommended reforms, the GRG correctly observed that rules and processes play an important but limited role in embedding good governance. The establishment of a strong organisational culture is an essential component of a governance framework, offering some protection against the fallout from poor choices and actions – reputational, ethical, financial and legal, as well as the experiences of those within an organisation.
By including specific recommendations relating to gender representation, the GRG went further than the CVC Code.
Targets can kick-start the push for more equitable representation and have been applied in other publicly funded sports sectors. They do present problems, however, and can mask systemic faults. The challenge for sports bodies is to shift away from traditional leadership demographics and to create and support new pathways, with defined routes of progression to senior positions. This is true of gender, ethnicity and other underrepresented sections of the community.
However, genuine diversity goes beyond visible differences, availing organisations of the broadest possible range of experience, perspectives and thinking.
This is all the more pertinent given the waters which all sports bodies must navigate.
The National Sports Policy gave notice that future resources may be targeted at fewer sports with greater podium potential. As such, income diversification – essential from a risk perspective – and exploitation of commercial opportunities will become more pressing concerns.
This raises the question of whether the boards of Ireland’s sports bodies possess the necessary tools and entrepreneurial instinct. ‘Insiders’ offer valuable insights into technical aspects, culture and history. But as the complexity of the sector increases, are they equipped to take their sports forward?
Sport is not as different as it likes to think, but its sense of uniqueness has contributed to the immaturity of its governance.
Its boards must adopt practices that are expected not only of administratively and financially competent organisations, but of those that seek to take young people and shape them into valued members of society. If the sector insists on occupying a privileged position, it must continue to earn this, and recognise that such status comes with higher expectations.
Sport should be under no illusion about where it is. Deep-rooted attachments to notions of autonomy and to special status still hold some sway.
UEFA and FIFA’s warning against government interference in the FAI, prompted by the Minister for Sport’s objection to President Donal Conway standing unopposed for re-election, is a case in point. The GRG report recommended that the role of President be separated from the Chair of the Board, but it will still carry a board position and be combined with Chair of the Council, the Football Management Committee and a place on the Nomination Committee. Though the report allowed for two board members to remain to aid transition, the appropriateness of one of these having presided over the previous regime for the past year, and having been a director since 2005, is being questioned.
Yet if resistance to progress can come from within, so can the impetus for change. Fans and participants want well-run sports. Governing bodies want to secure long-term viability, eradicate adverse behaviour and avoid negative publicity. Governance lies at the heart of this. These incentives, coupled with external pressures, show a clearer path to sustainable improvement.
Craig Beeston is Policy Officer (Not for Profit) at ICSA:The Chartered Governance Institute.