FIFA System of Governance - Assignment Example

FIFA System of Governance: An Analysis The structure of FIFA as an organization (see Fig is a pyramidal structure. At the top tier, there is FIFAand the confederation, which are recognized as the international governing body of football throughout the world. The mandate is not only confined to the promotion and development the game but also to guard and regulate football. The body is composed of six confederations, namely the AFC, CAF, CONCACAF, NONMEBOL, OFC and UEFA. Then, there are the national football organizations which also include in its auspices the professional and amateur football clubs within the national football association. They compose the lower level of the organization and operate league systems that are usually characterized by many divisions. National associations are the supreme governing body of the sport within the national boundaries and have the power to regulate and discipline its own members. These associations must be members of both FIFA and the confederation in which their nation is geographically resident in order for their teams to be able to enter in FIFA competitions. (OECD/FATF, 2009, p10) The lowest tier is composed of fans, players and the clubs along with regional associations. The structure of the organization demonstrates several important points. First is that FIFA or the whole football industry is consisted of two main pillars, the club football and national team football. Secondly, there is the fact that even though national associations have some degree of autonomy, they still have to subscribe to FIFA standards, rules and regulations. So the framework is – in some respects - not unlike a multinational business organization, with a centralized body that have the power over its subsidiaries regardless of the national sporting policies and norms. What this means is that the power rests on those at the apex, the FIFA itself. The organization is known to be an active force in national associations, suspending teams from participating in its competitions when they are in violation of FIFA rules. Fig. 1: The FIFA Confederation The internal governance of FIFA is considered to be democratic. The current system evolved from the old governing body dominated by a small secretariat, which was expanded and professionalized during a major reform initiative back in 1961. Today, the power, which was previously held by the Congress, is now largely given to the Executive Committee. The reason for this is that the group determines the location for its most popular and lucrative brand, the World Cup. The dynamics of FIFA’s system of governance is mandated by FIFA Statutes registered in Switzerland’s commercial register, which outlines the organization’s governance structure. The Statutes define and provide power to several main bodies, which include the Congress, the Executive Committee and the President. The system is not unlike a constitutional democracy, wherein the Congress is the supreme and legislative body. It elects the president, which in partnership with the Secretary General form the executive body. (“FIFA Statutes”, Art. 32) The system has been centralized. On the other hand, governance was also increasingly dominated by the President, who functions as chief executive officer, while leading the Congress and the Executive Committee at the same time. In business context, the President is analogous to a CEO and chairman of the board rolled into one. This typifies the concept of monistic system, wherein power in an organization is concentrated into in one position. This governance model has advantages and disadvantages. Strengths The strong presidential system allows for the efficient management of FIFA. Previously, it has been cited that the organization is a supranational body, covering different “subsidiaries” – in the form of national associations - across many countries and subscribing to the principles of business as well as economic phenomenon such as globalization. The current landscape, wrote Jarvie (2006), is dangerous because the global sporting interdependence requires a global or international sporting polity that can control, regulate sports and enforce order and sporting justice. (p156) Otherwise, sports will be ungovernable and unsustainable. Jarvie underscored that just as progressive globalization needs a system of governance at both national and international level, so too does sport. (p156) The FIFA governance structure allows for the efficient control and negotiation of the interdependencies involved and the opportunities and challenges that face the normal corporate multinational organizations. For instance, some governance system can be characterized by a diffusion of power. While a balance can be achieved in this system, it can be plagued by political power struggles, which could prove detrimental in the long-term competitiveness of the organization. (Hilb, 2008, p49) The monist system concentrates power within a position or a person, centralizing management and supervision, skipping the decision-making polarization that characterizes other models of governance. Burca and Weiler (2011) also pointed out that monist system of governance could overlap seamlessly with approaches to international legal order, which should address the control and regulatory challenges of highly pluralistic organization such as FIFA. (p127) The strengths of FIFA’s system of governance rest on the governance framework. Ideally, it can allow for efficient and fast decision making, which is crucial in the management and operation of FIFA as a business organization. The concentration of power, however, can bring about pitfalls and disadvantages when there is no system of checks and balances that can curb abuses of power. Unfortunately, this is the fundamental weakness of the system that became true in the case of FIFA. Weaknesses One of the stinging critiques about FIFA governance was voiced out by Sugden and Tomlinson (1998) who declared: In formal terms FIFA is a democratic institution accountable to its members and congress. In reality, in the last quarter of the twentieth century it was operated more like a fiefdom or a mediaeval court, conveniently cumbersome to bring together as one, and based upon patronage dispensed from the center and deference dispensed in return. (p71) The criticism has been valid for various reasons. The fundamental cause is how the government has been co-opted by managers who took advantage of the power and responsibility given to the FIFA presidency. For example, there is the case of the Sepp Blatter presidency. Several controversies and crises hounded his administration, most of which concern corruption and abuse of power. The first crisis involved the collapse of ISL, FIFA’s marketing partner, which involved millions of Swiss francs in losses and more importantly resulted in Blatter’s control of FIFA’s finances. Then, there is the 1998 election incident when Blatter was accused of vote rigging and that the money that financed his re-election came from oil-rich Gulf. It was reported that bribery was rampant on the African delegates at the Paris election congress. According to Allison (2005), n revelations first made to the Daily Mail, Farah Addo, a CAF vice president, offered the first concrete evidence in his claim that he had been offered a bribe by Mohammed Bin Hammam of Qatar to vote for Blatter on the eve of the election. (p32) In May 2002, another crisis erupted when Michel Zen-Ruffinen, the then Secretary General, originally groomed to succeed Blatter, revealed: FIFA is flawed by general mismanagement, dysfunctions in the structures and financial irregularities… Many FIFA representatives from places all over the world encouraged me with their full support to clarify matters in regard of the various harmful occurrences taking place in and outside of the headquarters of FIFA. (Allison, p34) Zen-Ruffinen’s expose hogged the news for a time and revealed how Blatter’s inner circle have systematically manipulated and corrupted the FIFA government. His revelations exposed the so-called F-Crew, an inner circle of four of Blatter’s closest collaborators. This group, which formally should perform an advisory role, is already dealing with appointments, budget and other important decisions. (Allison, p34) Blatter made it possible because his power allowed him to do so. This was also demonstrated in the findings of an investigation by David Will, which found that FIFA lost 215 million pounds from 1999 to 2002 and that Blatter disguised the loss by borrowing 313 million pounds against anticipated profits from the 2002, and 2006 World Cup. (Levermore & Budd, 2004, p118) What these crises demonstrate is the manner by which the governance framework has been compromised because it was implemented without any system of significant internal controls. If one examines the current auditing mechanisms at FIFA, one will only find those auditing tools that cover legal and tax risks and no mechanisms that would deal with corruptions such as those that happened in the Blatter regime. So what happened was that there are no checks and penalties for a manager who would want to perpetuate his rule or for a manager or members who accept payoffs. It is not surprising when the current governance is typified by a culture of patronage and corruption. Solutions There are several important measures that can address the weaknesses of FIFA’s structure of governance. The first, and as has previously been mentioned, was the setting up of appropriate auditing mechanisms. This should be specific anti-corruptions control system. The strong presidential form of governance is beneficial in terms of management as cited earlier, but it is vulnerable to abuse. To complement this auditing mechanism, the organization should adopt a code of conduct or a set of legally binding regulations that would address ethics, values, integrity and corruption problems. FIFA has for years taken a quasi-corporate form and the confederation is not shy in admitting that it is a business enterprise that needs profit in order to survive. What this recognition entails is not the pursuit of profit exclusively but also the adoption of best practices standards. It must also adopt transparency in all its financial dealings. The organization’s management cannot stake a claim on the benefits of operating within the sphere of globalization – free from government intervention - and still rule the organization like a fiefdom. Like any multinational organization, it must adopt a world-class compliance and standards program that clearly provide rules for accountability. Allison suggested that FIFA retain its current governance system but should perhaps be brought under the wing of international bodies such as the UN or the UNESCO so that all its important decisions can be scrutinized by officials, who, for their part, are themselves accountable to a broader electorate and for the organization to be subjected within a wider legal framework. (p44) Another suggestion is for FIFA to follow the model taken by the International Olympic Committee. The global sporting organization has also faced the same governance challenges particularly in regard to controversies involving corruption and bribery among its officials. In addition, there is also the fact that both were established by a group of well-meaning individuals. The IOC has stepped up its modernization and governance efforts following the controversies that hounded its leadership in the selection of locations in the previous Olympics games such as Salt Lake City bidding process. According to Skinner (2006), IOC also operated as the personal fiefdom of “invited” delegates. (p168) One of the centerpiece reforms undertaken was the adoption of transparency in its organizational processes. As Allison explained, “a culture of secrecy or perceived arrogance by international civil servants and policy elites can be seriously counterproductive,” and that “opaqueness and secrecy are enemies of an open international system.” (p43) Conclusion Unarguably, the current structure of governance, which resembles a monistic system, makes sense for FIFA. It works for the organization. According to Witzig (2006), there are numerous fundamental differences in the structure and ideology between stakeholders, clubs and countries and the rules and control that FIFA has over these diverse population allows for order and discipline. (p69) Like a well-oiled machine the system of governance enable the disparate parts of FIFA to effectively work independently and interdependently. This is the reason why there is weak resistance to FIFA’s policy of non-governmental interference on national associations. This is significant because FIFA events such as the World Cup are staged not just for corporate profit but also state-driven national pride. Countries recognize FIFA’s governance structure and respect it. It is, hence, unfortunate when incidents like scandals that plagued the Blatter presidency tarnish such regard. It diminishes the system, which, for most part, is actually effective. It is imperative, hence, to undertake reform. It is not necessary to “overly democratize” the organization or structural changes. What is needed is an effective and appropriate auditing mechanism. Transparency must also be adopted. FIFA is a truly global organization: it is no different from multinational business enterprises that must adopt best practices standards. References Allison, L 2005, The global politics of sport: the role of global institutions in sport. London: Routledge. Burca, G and Weiler, JH 2011, The Worlds of European Constitutionalism. Cambridge: Cambridge University Press. "FIFA Statutes: Regulations Governing the Application of the Statutes; Standing Order of the Congress" 2008, FIFA. Available from: http://www.fifa.com/mm/document/affederation/generic/01/09/75/14/fifa_statutes_072008_en.pdf. Hilb, M 2008, New corporate governance: successful board management tools. Berlin: Springer. Jarvie, G 2006, Sport, culture and society: an introduction. London: Routledge. Levermore, R and Budd, A 2004, Sport and international relations: an emerging relationship. London: Routledge. OECD/FATF 2009, Money Laundering Through the Football Sector. Paris: OECD Publishing. Skinner, J and Edwards, A 2006, Sport empire. Oxford: Meyer & Meyer Sport. Sugden, J and Tomlinson, A 1998, FIFA and the Contest for World Football: Who Rules the Peoples Game. Cambridge: Polity Press. Witzig, R 2006, The Global Art of Soccer. New Orleans: CusiBoy Publishing. Read More