Thursday, 2 June 2011

The FIFA bribery scandal: and Sepp Blatter

Well, how can I not write something about this spectacular news story. Even though it relates to a not-for-profit, global sports body it has so much to teach us about corporations.

To summarise the key facts; evidence is published, including some from internal whistleblowers, that seems to confirm what many people have talked about for years about FIFA - many people connected with it are corrupt and the right to stage the World Cup every four years seems to be bought and sold. Meanwhile the chap who has been president of the organisation whilst all this widely publicised misconduct has been going on puts himself forward as a reform candidate and is re-elected unopposed.

So, to the lessons;
  • Vested interests rule. If an organisation is doing well then there is little stomach for doing anything about a bit of corruption. FIFA has grown spectacularly under Sepp Blatter's stewardship, with annual income more than doubling since 2003. Over the four year reporting period to 2010 they have invested nearly $800m in football development around the world, being channelled largely through member associations. 
  • Wrongdoing thrives in organisations that operate under a single dominant personality. It derives from an absence of checks and balances and from all decision making being channelled through that individual. This person, to preserve power, will be reluctant to act against the interests of political supporters almost regardless of what they may do. This is regardless of whether the individual is personally corrupt.
  • Publicity for wrongdoing does have an effect but only if it threatens the performance of the organisation. So, only when the bad publicity for FIFA grew to an extent to threaten the image of organisations that sponsor the World Cup did official denial that there was any problem turn into some limited action.
All the rest is detail. I could write about systems and procedures, and those do matter, but they will not be effective if there is a dominant individual operating under big vested interests who are tolerant of a bit of corruption. Sure, the proposal to award future venues for the World Cup through a vote of the 200-odd member organisations, will make it a little harder to bribe to a result than the present system where there are only 24 voters. The largesse will have to be spread more widely. But, on its own, that change will not be sufficient to root out corruption.

In order to have a reasonable hope of preventing wrongdoing, there have to be independent powers who are able and motivated to oversee and control the executive management of an organisation.

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