Blog Post

Sports Organizations and Good Governance - More than Just Policies

Posted in Sports

Euro 2016 started last week and the International Olympic Committee is presenting the 2016 Olympic Games in Rio in less than two months. We have seen unprecedented investigations involving international sports organizations, including charges laid against top FIFA officials, pervasive and systemic doping infractions of which it appears the overseeing national sporting association was either willfully blind to or endorsed, and Canada has seen the then-President of the Canadian Olympic Committee step down after various allegations of inappropriate behavior.

To address these issues, organizations make statements about ensuring 'good governance' is in place going forward. In response to this, most people nod affirmatively and feel good about moving on.

When asked, few people (including the directors and officers of organizations) know what good governance actually entails. There is little fault in people not knowing as there are numerous interpretations of what good governance means. Further to this, there are countless discussions on how the principles of good governance (to the extent that we can agree on what those are) can be given effect in different types of organizations. Good governance principles can play out differently in public versus private sector organizations, widely-held organizations versus privately held organizations, and for-profit versus not-for-profit organizations.

When we look at national and international sports organizations, why do we care about good governance? Let's start by looking at what these organizations have in common. Aside from the fact that a significant number of these organizations often enjoy significant revenue from broadcasting rights and brand marketing, these organizations, at their core, set the standards and rules under which athletes around the world develop and compete. Many of these athletes start living under these rules when they are extremely young, some leaving their homes and families before puberty and all of them sacrificing a significant part of their life just for the possibility and opportunity to compete on the international stage.

The international sports organizations set the standards and rules and then require the associated national sports organizations to adopt those standards and rules to be eligible to compete in internationally-sanctioned events, such as the Olympic Games, FIFA World Cup and World Championships, as well as the lesser-known competitions.

Whether one supports good governance because it is the appropriate standard of good business practice, it's easier to obtain sponsorships if you can prove good governance practices, or because your eye is on the impact that good governance has on the athletes and the sport, there are good reasons to ensure sports-related entities adopt and operationalize good governance policies and practices.

While there is no absolute uniformity in what good governance means, there are certain common principles. For example, rules around governing and decisions should be transparent, accountable, equitable, and the policies and practices of the organization should follow the 'rule of law.'

A blog post could not nearly do justice to what these principles mean, but generally speaking, one of the key goals of good governance is to provide a framework within which organizations can make objectively good decisions and, in those instances where decisions or actions should be questioned, provide independent oversight over such decisions and actions.

Many national and international sports organizations have adopted written policies that reflect good governance models. However, a mistake that organizations often make is to assume that having policies reflecting good governance models is sufficient.

Try as it does to rebalance power and inject objective oversight, a good governance framework (policies) operates within the realities of money, power and politics, which play out in day-to-day decisions and actions which are not always elevated to the oversight of independent persons. The day-to-day actions and decisions of the organization, in totality, often impact the organization more significantly in the long-run than the larger issues which are more public in nature.

The issue of appropriate delegation versus oversight is often at the core of the disconnect between having good governance policies and practices. For example, there is an interesting and delicate relationship between senior officers of organizations who make the day-to-day decisions and who direct the day-to-day operations, and the directors who are responsible to their members and act in the best interest of the organization. In certain good governance models, a significant amount of delegation and trust is bestowed upon the senior officers by the directors. Most of this delegation and trust is specifically contemplated in the governance documents and is appropriately granted. However, that delegation is not absolute and is not unconditional. Directors are still accountable. They must be knowledgeable about the larger issues the organization is facing and question matters when it appears that the officers are acting or making decisions in a manner that is contrary to the best interest of the organization.

Euro 2016 is underway and the Rio Olympics are less than 60 days away. We will be watching the world's best athletes represent our respective countries and compete to go down in record books. Most of us will not turn our minds to the behind-the-scenes governance of the organizations as we cheer for our teams. However, we cannot forget that the governance happening behind the scenes determines the events we watch, which athletes and teams will be competing and sets the standard and regulates the growth and development of the athletes we are cheering for.