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The future is bleak without governance

07 June 2016 by Henry Ker

The future is bleak without governance - read more

Lord Moynihan talks about the sport sector falling behind the times, the need for reform at top level and how governance is essential to the future of sport

Lord Moynihan was Chairman of the British Olympic Association in the run up to London 2012, Cox for the GB Rowing Team for six years, a silver-medal Olympian and gold and silver medal winner at the World Rowing Championships. He also served as Sport Minister under Margaret Thatcher.

 

Have you experienced or witnessed governance failures during your career?

Yes – the major challenge for sport both nationally and internationally is governance. Internationally this has been seen very clearly: at Salt Lake City, the International Olympic Committee, Formula One and, more recently, FIFA and the International Association of Athletics Federations.

The common denominator of all those major problems was weak governance. The biggest challenge that sport faces this century is putting in place highly professional governance that supports the interests of sportsmen and women.

Can you explain the current state of governance in the sport sector and why it is inadequate?

It is important to set this in the context of the development of international sport. In the 1990s sport moved from the domain of the amateur – ‘shamateurism’ was the word that was used in the 1980s and 1990s when many athletes were handed cash in brown envelopes to compete.

Governance unquestionably relied heavily on the volunteers who spent their lives supporting sport, from clubs through to governing bodies and indeed to international federations.

Come the mid-1990s, large-scale international sponsorship and television coverage transformed the world of sport as billions of dollars came into it – but the governance did not change.

At the same time governments recognised the importance of sport and recreation as a policy tool. This applied as much to those governments that already used it to provide an international platform of recognition – particularly the Eastern Bloc during the Soviet year.

But now all countries look to sport increasingly to address health issues, fight against obesity and for education policy, as well as teach confidence and the benefits of working together to win and how to lose.

Quite often disenfranchised people understand the language of sport but reject the traditional language of education. In international relations, sport is a means of communication, which traditional political links do not deliver.

Many of the same people who were leading international sport in the 1990s were there in the 1980s when they created their own modus operandi, their own internal rules and regulations and, in many cases, failed to engage with governments.

Out of that were born international bodies such as the Court of Arbitration for Sport, the World Anti-Doping Agency and other bodies which were, on the whole, mostly self appointed, as were the international federations.

So there was discord between what was happening in the real world and what was happening in sports governance. This created an environment in which, moving into the 21st century without a real form of governance, the same people were managing hundreds of millions of dollars and were light years away from the governance requirements found in a FTSE 100 company. Inevitably, the consequence of that is the governance crisis we have witnessed in sport over the past 15 years.

What does good governance look like for the sport sector?

There are three key building blocks for good governance. The first is transparency; the decision-making process and the outcomes of those in charge of sport need to be wholly transparent and we are a long way from that point.

Secondly, and equally important, is those who represent the sportsmen and women need to be accountable to them. That means including sportsmen and women at the heart of the decision-making process.

They should also be accountable to all other stakeholders in national and international sport, including, for example, the sponsors, the media and the officials who give a lifetime of commitment to sport.

The third element is professional management. The board of Exxon, for example, has a combination of top experts in the field and independent directors, together forming a cohesive unit that is transparent, accountable and professionally managed.

There is absolutely no reason why that model should not be employed in every sporting national governing body and international federation.

Is there a lack of business skills at board level in the sport sector, arising from players being fast tracked without the necessary experience?

Yes, there is an absolute need for more business skills and more independent directors. There is a need to look for the skillsets required to represent the sport, such as effective auditing processes, established nomination procedures, and quality non-executive directors with relevant experience. Athletes should be at the heart, not only of every governing body, but also represented on the board. And, of course, chairs should be independent.

The corporate governance code is a good starting point. I would like to see sport go as far, if not further, in terms of business skills and diversity − more women are needed at top levels of sport.

Women are lamentably underrepresented on sports governing bodies and on the international sporting federations; yet the International Olympic Committee rightly prides itself on being 50:50 in terms of representation of women and men.

Most people on sport boards are unpaid volunteers – is this contributing to the governance problem?

Yes, but without unpaid volunteers sport would not exist and thrive in the way it has for decades. However, unpaid volunteers best serve sport at grassroots level – they do not bring the expertise that is essential to run major international multi-million pound sporting businesses, and manage political relationships.

I could not be more supportive of unpaid volunteers because they are the building blocks of international and national sport, but they do not necessarily bring the expertise necessary to manage and run those sports at the top level.

Do sport bodies need a more thorough recruitment process and to do more in terms of succession planning?

Yes, every governing body should have a tried and tested succession plan as well as athlete commissions, audit, nomination and corporate governance committees. The nomination committee should use best endeavours and a professional approach to identify the expertise required to run its sport.

There have been numerous sporting scandals in the press recently − what can be done to overcome the seemingly endemic problems in the sector?

Apart from governance, the biggest challenges the international federations face are doping, match fixing and irregular gaming. As far as these issues are concerned, they need to be tackled with the direct support and assistance of governments.

The World Anti-Doping Agency (WADA) is weak and defenceless unless there is a strong body of legal support for it at national level. In the last three years, Germany, Belgium, Italy, Spain, France, Japan, Russia and China have all recognised that and are implementing or have implemented a statutory framework to tackle the worst abuses of doping in sport.

Similar issues apply to the corrupt activity of illegal gambling in sport. If we are going to effectively tackle this and the corrosive impact it has on match fixing, we need international police cooperation from Interpol because it is a global problem. It is a global problem because the IT means that are necessary to promote illegal gaming are readily accessible.

To tackle these problems, legislative change needs to be the first priority. Frankly, WADA is floating around in the ether having minimal effect, as has been seen in the last couple of years. Despite being the world anti-doping agency, you can count on one hand how many major scandals it has identified. Virtually all the scandals have been brought to light by the press − that says a lot about WADA’s ineffectiveness.

Every time match fixing is reported we hear from players that ‘everyone knows it goes on’ ­– is there a breakdown in the whistleblowing process?

In each sport – and indeed every company with an effective whistleblowing process – the effectiveness of such a policy is intrinsically linked to the confidence the potential whistleblower has that their confidentiality will be respected and their evidence acted upon.

A whistleblowing process is no good unless those two criteria are fulfilled. But the solution goes beyond whistleblowing. We need the right legal framework so that athletes understand the consequences of gambling, match fixing and doping. To do that there needs to be a comprehensive programme of education for athletes in all age groups.

From the moment you become the member of a national team, all the way through to Olympic success, I cannot overestimate the importance of effective educational programmes.

However, those educational programmes are weakened by the absence of legal constructs to support clean sport. For example, not only athletes, but medics, parents and coaches too, must understand the consequences of cheating by taking a cocktail of drugs.

Has the demand of professionalism on sportsmen and women undermined the concept of fair play and moral spirit?

I do not think professionalism has anything to do with it. In business, I have found very few examples of people who willingly avoid good governance because of the potential to make more money. On the contrary, some of the wealthiest companies in the world have the highest levels of good governance and accountability.

In my experience, wealthy sportsmen and women do not leave the importance of good governance on the sidelines. They recognise they are role models in society and need to set an example by their behaviour on and off the court. For example, the lifestyles of Nadal and Federer in front of the cameras and the importance they attach to the values of the game are second to none.

Yet for many aspiring athletes there is a problem. If those in charge of their sport are corrupt, ignoring good governance, self-seeking or failing to recognise that they are there to represent the athletes and set the highest possible standards – both professionally and ethically – then there is a corrosive impact on the sport as a whole.

Sponsors and funders expect good governance within sporting organisations and they will challenge when they see failings − is this where the motivations for change will come from in the future?

The motivation for change should ultimately come from the athletes and those who are elected or appointed to represent them. The fact that it has not, and that too often it is too late in the day to act, has led sponsors to come to the table, highlighting the fact that if the international federations and governing bodies do not act, they will.

They will act because their governance requires them to be transparent with their shareholders – and their shareholders will not put up with anything that is seen to damage their product or their commercial reputation. I welcome sponsors being involved, but instead of coming after the event, I would prefer them to be involved with the development of good governance right from the start.

Is sport complicated by confusion over what success looks like? For example, revenue or sporting success.

When you chair a company, your goal is to compete to be the best. The job of any governing body, first and foremost, is to put in place the support mechanisms to ensure that your athletes have the best opportunity to deliver their personal best on the day.

When I came into the British Olympic Association our performance as a team had been mediocre. Thanks to the likes of Sir Clive Woodward, we moved up the medals table to taking third place in London 2012.

That was because of a completely professional attention to detail; the philosophy of marginal gains; a total reliance on high performance, professional management, accountability and transparency with the athletes in everything we did.

It was a professional team effort. It could not be done in a couple of years. It took us seven years from Beijing to London 2012 to deliver success. Clive Woodward personified this approach and he and his performance team were instrumental in Britain’s success.

There is no difference between that approach and Exxon wanting to be best in the oil and gas business worldwide, or British Aerospace delivering market leading technology in its sector.

The combination of quality management, a highly professional approach and good governance provides the framework necessary to deliver your objectives and KPIs. In the context of a sporting body, the aim must be to be the best in the world.

What do you think the future of governance in sport will look like?

The future of sport is bleak without good governance. The extraordinary opportunities that sport can deliver can only be achieved if, and only if, the quality of management and the right procedures and policies are in place.

This means the eradication of conflicts of interest, first-rate management, complete transparency and a new level of accountability which will make today’s governance look Victorian by comparison.

Interview by Henry Ker, Deputy Editor Governance and Compliance

 

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