The Blat­ter­ball Diaries

Financial Mirror (Cyprus) - - FRONT PAGE -

The World Cup has con­cluded with its usual flour­ish, and much of the world, as usual, couldn’t help but get caught up in the ex­cite­ment of it all – which is ex­actly the out­come that Sepp Blat­ter wants. Blat­ter, the pres­i­dent of FIFA, the Cup’s or­gan­is­ing body, wants the af­ter­glow of an ex­cit­ing month of play to blot out the cor­rup­tion and back­room deals – and, most re­cently, a ticket scan­dal – that have roiled his ten­ure.

Times were very dif­fer­ent in 1998, when Blat­ter took up his role. So­cial me­dia did not ex­ist, and the In­ter­net had not yet be­come a means of spread­ing the views of the voice­less and dis­en­fran­chised. Nor was the cul­ture of share­holder ac­tivism and cor­po­rate so­cial re­spon­si­bil­ity as strong as it is to­day. As BP, GM, and Royal Bank of Scot­land have dis­cov­ered, the world is watch­ing, talk­ing, and no longer will­ing to ac­cept the old way of con­duct­ing busi­ness.

FIFA has two prob­lems. One is a straight­for­ward lack of com­pli­ance with ac­cepted busi­ness prac­tices. Al­le­ga­tions of wrong­do­ing range from match-fix­ing and bribery among mem­bers of FIFA’s Ex­ec­u­tive Com­mit­tee to ques­tions about how Qatar was cho­sen to host the World Cup in 2022.

The sec­ond prob­lem is ar­guably more se­ri­ous, for it is epiphe­nom­e­nal: the dam­age that un­eth­i­cal be­hav­iour has done to the ideal of fair play. When people see an in­sti­tu­tion that re­lates to some­thing that they feel pas­sion­ate about fail­ing so pub­licly to abide by sim­ple rules, they lose faith not only in that in­sti­tu­tion, but also in the idea that good gov­er­nance is achiev­able at all. The mes­sage sent, and un­der­stood, is that some in­sti­tu­tions – of all kinds – are im­mune from scru­tiny and can play by their own rules.

The code of con­duct on the field – where we ex­pect play­ers to give their all un­der clear rules that are swiftly en­forced by in­de­pen­dent ref­er­ees – is fun­da­men­tally the same as what we ex­pect from gov­ern­ing bod­ies off the field. In this sense, FIFA is not a spe­cial case: All non-profit and for-profit or­gan­i­sa­tions around the world are ex­pected to abide by this code of con­duct.

And that is why FIFA’s prob­lems are un­likely to fade from view. They must be ad­dressed head-on, with a clean sweep of its lead­er­ship and a com­plete over­haul of its gov­er­nance struc­tures. FIFA is as com­plex as any large multi­na­tional pri­vate or pub­lic or­gan­i­sa­tion; how it is gov­erned must re­flect that.

For starters, FIFA must in­tro­duce truly in­de­pen­dent board mem­bers to the gov­er­nance process – people who will ask hard ques­tions and chal­lenge the or­gan­i­sa­tion’s ex­ec­u­tives. Gov­er­nance solely by as­so­ci­a­tion mem­bers has not worked – and, by en­cour­ag­ing a lack of trans­parency, may have made FIFA more vul­ner­a­ble to the prob­lems it now faces. No or­gan­i­sa­tion that holds so much pub­lic in­flu­ence and im­por­tance should be able to op­er­ate as a black box.

Like­wise, FIFA must in­tro­duce and ad­here to clearer term lim­its for its pres­i­dent and board mem­bers, start­ing with Blat­ter – and with im­me­di­ate ef­fect. More ef­fec­tive checks and bal­ances will not come eas­ily; but they will not come at all with­out cham­pi­ons. Be­fore the World Cup be­gan, some rep­re­sen­ta­tives of FIFA mem­ber as­so­ci­a­tions spoke up in op­po­si­tion to the sta­tus quo. It will now be seen whether their ac­tions re­flect their words.

There are other glim­mers of hope. In the world of for-profit com­pa­nies, in­vestors are in­creas­ingly de­mand­ing bet­ter cor­po­rat­e­gov­er­nance stan­dards and more di­verse boards that in­clude in­de­pen­dent mem­bers. They are tak­ing a much more ac­tive and pub­lic role in speak­ing out against bribery, cor­rup­tion, and ex­ces­sive pay pack­ages, and in favour of cor­po­rate so­cial re­spon­si­bil­ity and fair labour prac­tices. If their calls go un­heeded, they vote at the an­nual gen­eral meet­ing – or with their feet.

Sim­i­larly, spon­sors must hold FIFA to ac­count, and there are signs that some are fi­nally be­gin­ning – al­beit ten­ta­tively – to speak out. If they don’t, spon­sors will leave them­selves ex­posed to a con­sumer back­lash as FIFA’s poor rep­u­ta­tion rubs off on their brands. Cus­tomers are savvier than ever be­fore, and they, too, can vote with their feet.

Ul­ti­mately, how­ever, change starts at the top. Con­sider what a change in lead­er­ship has done for the Ro­man Catholic Church: Pope Fran­cis is trans­form­ing an in­sti­tu­tion that was thought to be so byzan­tine, opaque, and in­tractable that change was all but im­pos­si­ble. If the Catholic Church can change, so can the church of foot­ball.

There is an­other les­son here: good lead­er­ship also con­sists in know­ing when to step down. If Blat­ter gen­uinely cares about FIFA, he knows that re­main­ing there would mean drag­ging the or­gan­i­sa­tion fur­ther into dis­re­pute, dam­ag­ing what­ever pos­i­tive con­tri­bu­tions he has made, and quite pos­si­bly be­ing forced to leave un­der a cloud.

The cap­tion to a pic­ture of Blat­ter on page six of FIFA’s 2013 fi­nan­cial re­port reads: “We have reached very high lev­els of ac­count­abil­ity, trans­parency, and fi­nan­cial con­trol.” The prob­lem is that no one be­lieves it. FIFA des­per­ately needs to re­store its pub­lic cred­i­bil­ity. That can hap­pen only af­ter the nec­es­sary changes at the top and through­out the or­gan­i­sa­tion have been achieved.

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