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Changing Directions

04 July 2019 by Craig Beeston

Changing Directions

The latest in ICSA’s thought leadership series is 'The Future of Sports Governance – Beyond Autonomy' which assesses the implications of various pressures on the concept of sporting autonomy

The past couple of decades have seen enormous changes in the sector, both in terms of on-field performance and in sport’s place in the wider business, political and social landscapes. Interest and involvement in sports organisations now extends across sectoral boundaries, and stakeholder groups are far more numerous and diverse than the members who originally formed the associations, with the result that demands placed on sports bodies are greater and more multi-directional than ever before.

In October 2016, the introduction of the mandatory Code for Sports Governance heralded an overhaul of governance in the UK publicly funded sports sector, challenging bodies invested in not only to revise their governing structures and practices, but also in some cases to reassess the principles of self-determination which to a significant degree have defined the sector’s approach to its governance, and which still hold some sway.

The Future of Sports Governance – Beyond Autonomy assesses the implications of all of these pressures on the concept of sporting autonomy – essentially the position that sport is unlike other areas of the economy, occupies a unique role in society, should be treated differently and essentially be left, within reason, to run itself. It is a concept with its roots in the associational origins of many sports’ governing bodies and in nineteenth- and early twentieth-century liberalism.

Sport’s contention that it is a special case begins to suffer when the argument is reduced to two questions. Do you deal with money? Do you deal with people? The answer to both is yes.

Though advocates for autonomy contend that sport is not an economic activity like any other, it is nevertheless an economic activity. In the modern world of funding agreements, sponsorship and licensing rights, significant money – including public funds – can pass through certain sports bodies, with jobs, livelihoods and investments hinging on performance on and off the field of play. And of course many of those people in contact with sport are among our most potentially vulnerable. These considerations make how the organisations are run a primary concern.

Sport’s Roles

The claims which the sport sector makes of its reach and potential impact are well-founded. Almost a quarter of the population over 16 engage in sporting activities. 75 million people attended professional sports events in the UK in 2017. Physical activity contributes an estimated £39 billion to the economy each year.

The importance that successive governments have attached to the sector for these reasons – and for the more intangible benefits of prestige, pride and political opportunism – is reflected in the investment made from the public purse. The central government committed £6.25 billion to staging the London 2012 Olympic and Paralympic Games, with a further £2 billion coming from the National Lottery. In excess of £1 billion of Exchequer and Lottery funds was invested in elite and grassroots sport prior to the Rio Games in 2016.

Sport is also being increasingly used as a policy tool, supporting a range of social and political priorities. From tackling medical and societal trends to encouraging community cohesion and economic stimulation, the sector as a whole and individual organisations are being called upon to deliver in areas that could not have been envisaged at their foundation. This has given rise to an almost inevitable conflict. Sport is being asked to fulfil more roles and contribute to wider objectives and is being provided with significant sums of public money to do this. Yet elements of the sector remain insular, protective of their autonomy and continue to argue for special status.

Qualified Autonomy

Even where a special case is made for sport, conditions have usually been attached. The IOC’s Thomas Bach has referred to ‘responsible autonomy’, whereby sport exercises its independence in accordance with the rules of good governance. Similarly, former FIFA president, Sepp Blatter, asserted that autonomy from external influences ‘brings with it the obligation for good governance by the sporting authorities, promoting transparency and open-mindedness’.

The irony of these pronouncements coming from such institutions is not lost. Yet the Council of Europe’s Committee of Ministers too noted that the legitimacy and autonomy of sport depend on upholding the highest standards of ethical behaviour and good governance, adding that public authorities have a key role to play in promoting the implementation of such principles.

The Code for Sports Governance

This has proven to be the case in the UK. The introduction of the Code for Sports Governance, in part to protect public investment, with its mandatory compliance requirement – the first in the UK and a move dubbed ‘comply or else’ – represents definitively the end of autonomy, at least for funded organisations. In its place is a form of earned autonomy. The sector in the UK now has a formal agreement that public money will only be granted in return for individually specified governance standards being met.

The rate of compliance with the Code has been taken as a success. This is certainly true to a point. The speed with which governing bodies ushered through the required governance reforms, including constitutional changes in some cases, could be argued to point to a desire to improve the way in which they are run. It could also suggest an over-reliance on public funding which raises concerns as to future sustainability.

The true mark of success will be in the implementation of long-term, sustainable change borne out of cultural maturity rather than an immediate response to the financial sword of Damocles. A mandatory code, armed with powerful cash levers, can certainly set in train positive governance developments. Yet there remains the concern that it risks undermining a genuine culture of good practice, even embedding a tick-box mentality.

Negative inducements such as funding withdrawal must be balanced with the promotion and incentivisation of good practice and, crucially, the support needed to implement these. The funding bodies – UK Sport and Sport England – recognise this and the next phase of the Code’s lifecycle appears to be to move beyond compliance and focus on driving governance improvement in the sector. Ensuring that governance cultures, attitudes and mind-sets keep pace with compliance will be essential to the long-term implementation of the Code and good practice more generally.

Network Accountability

What the Code seems to have done is alter the locus and direction of accountability for compliant organisations. Traditionally, many governing bodies were membership associations. For those which still vested primacy for decision making in their councils, the requirement that this be transferred to a board represented a significant shift, with an impact perceived by some on democracy and legitimacy, particularly when combined with minimum numbers for independent non-executive directors – seen in certain quarters as ‘outsiders’. That this was achieved so quickly again raises questions about a dependency on public investment.

But if accountability now seems to be upwards, rather than back down to clubs and members, it is also external. In fact, the trend is towards a form of network accountability where pressures are felt from multiple directions as more and more stakeholders are involved. In part, this is due to sport’s widening role, but also because governing bodies are now membership organisations, employers, property rights holders, commercial partners, community hubs and more – all at the same time. The attempts to tackle integrity threats provide just one example of the modern landscape.

Combatting ever more sophisticated incursions which are no respecters of jurisdiction requires a transnational, multi-agency response. As the threats grow and evolve, so too must this interaction.

Diversity and Inclusion

The goal for sports bodies must be the attainment of parity – of opportunity and of reward – so that the experiences of all involved in the sector is equal. The white, male hegemony is beginning to be challenged, but much progress remains to be made.

The Code received some criticism for setting a target for gender representation on boards but not for other under-represented sections of the population. Targets might offer some utility, but have their limitations. They can be met in the short term – by reducing board size or parachuting in talent from other sectors. The challenge for sports bodies will be to create their own pathways. This will require a shift in still deep-seated perceptions of leadership, as well as the provision of support and encouragement, and defined routes of progression to senior positions.

On the gender issue alone, new thinking will be required. The future ahead of sports bodies is a non-binary one. Competition, participation, facilities and representation must take into account greater fluidity and nuance in gender issues. Much of this is emerging and responses to it are untested.

A wider perspective needs to be adopted with regard to diversity in general, extending the focus beyond gender and ethnicity, and even beyond the protected characteristics of the Equality Act.To flourish, sports bodies – in common with others – must embrace challenge, novel approaches and diverse thinking.

Future Challenges

This is all the more essential given the waters all organisations must navigate in the future.

The government has signalled that public investment in sports governing bodies will be reduced. So for funded bodies as well as those not in receipt of public monies, diversification of income and the exploitation of commercial opportunities will become more pressing concerns. This will require some business nous. Corporate entities also often have in place more sophisticated governance and integrity structures and expect them to be matched in their sporting partners.

In a competitive market, all sports must vie for participants, support and custom, as the recent trend towards re-booted formats illustrates. This is not without its pitfalls. And for those sports where broadcast revenue is an option, this too is seemingly in flux as audiences fragment (and in some cases fall) and new media players enter the picture. This will impact how rights deals are negotiated and how value is derived.

All this makes it essential that the boards of sports bodies are equipped with the skills, experience, diverse perspectives and entrepreneurial instinct to meet these challenges, exploit the opportunities ahead and reach out to the broadest communities in order to sustain themselves long term.

There is also the fundamental question of what sport is for, given the multiplicity of roles it now fulfils. At the participatory level, what value is placed on outcome? The debate around elite funding in the UK rightly queried whether numerous incidences of adverse behaviour were the consequence of a single-minded pursuit of success and whether current investment destinations were the most equitable and warranted.

A Hopeful Future?

In a sector that has sometimes been resistant to change, the impetus for it can come from within. Fans and participants want well-run sports, for now and for the future. Governing bodies themselves want to secure their long-term viability and avoid negative publicity. Couple these with external pressures and the leverage of the mandatory code and the path for improved governance becomes somewhat clearer.

Sport needs to be realistic about what can be achieved and within what timescale. In certain respects, it was starting from further back than some sectors. The key tests for the future may hinge on creating proportionate and sustainable responses to the challenges – those current and those evolving – that it faces. 

The Future of Sports Governance – Beyond Autonomy was launched at Manchester Metropolitan University in May at an event attended by invited guests and the students of the Master of Sport Directorship course. Following a presentation of the report, Craig Beeston was joined by ICSA chief executive Simon Osborne, sports lawyer and consultant Kevin Carpenter and MMU’s Sara Ward for a panel discussion and audience questions.

Find out more icsa.org.uk/knowledge/resources/future-of-sports-governance

Craig Beeston is Policy Officer, not for profit at ICSA: The Governance Insitute

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