FIFA faces the prospect of remaking an entire ethical culture across its 209 member nations if it is to survive the corruption scandals that have engulfed the global soccer body the past two weeks.
It’s a culture that clearly has failed the organization as presently constructed.
One such example of that culture, codified in FIFA’s conflict-of-interest policy: If an executive, officer or employee has a potential conflict, he or she is under no obligation to report it. Asked on U.S. tax returns whether the organization requires self-reporting of conflicts, or whether it consistently monitors and enforces compliance, FIFA checked “no” to both questions.
It also checked “no” when asked on the form if the organization has a whistleblower policy.
How unusual is this? Compared with 10 other major sports organizations whose returns are public, including the NFL, the International Olympic Committee and the U.S. Olympic Committee, those other organizations all require self-reporting of conflicts, and they monitor and enforce their policies. (see chart below)
“If they are not checking the policy or monitoring it, or even asking for disclosure, it’s not worth the paper it is written on,” said Vernetta Walker, chief governance officer of BoardSource, which advises nonprofits on proper corporate structures.
FIFA, while based in Switzerland, is required to file a public tax return in the United States because it’s organized as a nonprofit.
FIFA did not reply for comment on its conflicts policy.
FIFA also is the only organization, other than the IOC among the group examined, not to disclose individual compensation for officers and directors. The soccer body does disclose total executive and employee pay, which topped all of the other organizations examined at $102 million in 2013, the most recent year publicly available. Between 2008 and 2013, according to the returns, FIFA, which has roughly 400 employees, has paid $478.3 million to its top executives and employees.
The document does not specify how many individuals are represented in that group of top employees.
While a serious conflict-of-interest policy is critical to any group’s ethical practice, FIFA’s recent problems clearly do not boil down to just a policy that it doesn’t monitor or compel members to follow. That’s more symptom than cause. Instead, changing the moral culture of FIFA is a mountainous task that crosses international cultures and will require sterling new leadership.
“In a private company you would see a substantial revamp, an [executive] housecleaning with all the problems that have been identified,” said Michael Fine, senior member, ethics and compliance advisory practice at LRN, which advises companies and organizations, including the NFL, on sustainable systems of governance, culture and leadership.
There are serious hurdles to doing that, though, because of FIFA’s structure.
Each of the 209 member nations (and some of those aren’t even recognized by the United Nations as countries) enjoy an equal vote in elections. In many of these countries, corruption is rife, and the person voting in the FIFA election not only has grown up in that culture but has also become successful because of it, Fine said.
In other words, it’s a long process to reform FIFA, with new policies not enough, he said.
But it’s not hopeless. Fine compared FIFA’s challenges to corporations establishing global distribution chains. These companies use role modeling for national chapters and communicate that doing business with integrity is good business, he said.
A strong new leader is also necessary. Outgoing FIFA President Sepp Blatter is stepping down as early as December.
“Every indication is this stems from the top,” said Arlen Kantarian, the former head of professional tennis at the U.S. Tennis Association and who sits on several corporate boards. “Good companies have anonymous tiplines, all employees sign a conflict-of-interest policy, and they don’t just monitor it; it’s everyone’s responsibility.”
Mark Rowe, LRN’s advisory services and knowledge leader, said FIFA must ensure that character is a major component of how it evaluates its forthcoming candidates for president. That pertains both to what can be demonstrated now and what can be seen from the past.
“The new president needs to show a conscious display of ethical leadership,” he said, “and have a proven record in ethical leadership.”
How other leagues and properties handle matters of corporate administration.
| Group |
Conflict of interest policy? |
Requires executives, directors and members to disclose potential conflicts annually? |
Monitors and enforces compliance? |
Whistleblower policy? |
Written documentation retention/destruction policy? |
| FIFA |
Yes |
No |
No |
No |
Yes |
| International Olympic Committee |
Yes |
Yes |
Yes |
No |
Yes |
| U.S. Olympic Committee |
Yes |
Yes |
Yes |
Yes |
Yes |
| U.S. Soccer Federation |
Yes |
Yes |
Yes |
Yes |
Yes |
| NFL |
Yes |
Yes |
Yes |
Yes |
Yes |
| NHL |
Yes |
Yes |
Yes |
No |
No |
| PGA Tour |
Yes |
Yes |
Yes |
Yes |
Yes |
| LPGA |
Yes |
Yes |
Yes |
Yes |
Yes |
| ATP |
Yes |
Yes |
Yes |
Yes |
Yes |
| WTA |
Yes |
Yes |
Yes |
No |
Yes |
| U.S. Tennis Association |
Yes |
Yes |
Yes |
Yes |
Yes |
Note: Organizations listed above file tax returns in the United States annually, through which they disclose the noted information.
Compiled by Daniel Kaplan
Sources: Tax returns for the organizations
