Collected Insights from the Field of Sport of Sport Field the from Insights Collected Collected Insights from the Field of Sport Volume 3: Governance and Ethics

Governance and Ethics are possibly chapters in this book are derived from the main topics of scrutiny in the sports research papers that have been produced industry today. Over the past few years, by the participants, visiting professors and several scandals have marred the image members of the Scientiﬁc Committee of of sports and it is imperative to adopt the AISTS postgraduate programme, the good governance practices. Governance AISTS MAS (Master of Advanced Studies in sports needs a multidisciplinary in Sports Administration and Technology). approach, leading to a change in mindset. A solid governance foundation in sport will Being grounded in research, the book ultimately beneﬁt the youth and foster its aims to throw light on good governance sustainable growth as an industry. theories and practices in the world of sports, touching upon topics from This book from the AISTS (International boardroom ethics to gender equality. The Academy of Sports Science and outcomes can be utilised by academics, Technology) is the third in the series sports administrators, sports teams, ‘Collected Insights from the Field students and the public to engage the of Sports’. It concentrates on the discussion on governance and ethics in

aforementioned challenges of good sports. Volume 3: Governance and Ethics governance and ethics in sport. The

AISTS (International Academy of Sports Science and Technology) EPFL Collected Insights Innovation Park Bâtiment C 1015 Lausanne Switzerland from the Field of Sport [email protected] Tel: +41 (0)21 353 03 90 Volume 3: Governance and Ethics

Edited by - Juan Carlos Landrove, Geert Hendriks First published in Lausanne , Switzerland in 2017 by the AISTS (International Academy of Sports Science and Technology) at the EPFL (Swiss Federation Institute of Technology Lausanne) Reprography

Cover photography: StockSnap (ID 7TI7OKDFYV)

All rights reserved. Apart from fair dealing for the purposes of study, research, criticism or review as permitted under the applicable copyright legislation, no part of this book may be reproduced by any process without written permission from the publisher.

Collected Insights from the Field of Sport, Volume 3: Governance and Ethics Editors: Juan Carlos Landrove, Geert Hendriks

Includes bibliographical references and index.

ISBN 978-2-83399-1792-6

International Academy of Sport Science and Technology (AISTS) EPFL Innovation Park Bâtiment C 1015 Lausanne Switzerland [email protected] Tel: +41 (0)21 353 03 90 Collected Insights from the Field of Sport Volume 3: Governance and Ethics

Editors: Juan Carlos LANDROVE Geert HENDRIKS Table of Contents Table of Contents

Foreword 7

Juan Carlos LANDROVE & Geert HENDRIKS

Chapter 1 – Switzerland 11 Switzerland’s Responsibility in the Regulation of International Sport

Jean-Loup CHAPPELET

Chapter 2 – Corporate Governance 19 Corporate Governance: Challenges for International Sports Federations

Giovanni Battista DERCHI, Antonio DAVILA & Daniel OYON

Chapter 3 – Doping 35 The Governance of Doping in Sport

Gérald GREMION

Chapter 4 – Anti-Doping Laboratory 45 Good Governance at the Anti-Doping Laboratory

Laurent RIVIER

Chapter 5 – Return-to-Sport 71 Reﬂections on Return-to-Sport Issues in Competitive Sports

Boris GOJANOVIC

Chapter 6 – Sex Policing 89 From Proving that You are not a Man to Proving that You are Woman Enough. The Challenges of Sex Policing in Elite Female Sport

Olivia Aya NAKITANDA & Gérald GREMION

Chapter 7 – FIFAgate 111 The Emergence of “FIFAgate” and the Governance Strategy Adopted to Overcome the Crisis

Emmanuel BAYLE & Hervé RAYNER

AISTS International Academy of Sports Science and Technology 3 Table of Contents

Chapter 8 – Para-sports 141 The Governance of Para-divisions in Olympic Sport Federations. Opportunities and Challenges

Géraldine HEINEN & Jennifer SMITH MAGUIRE

Chapter 9 – Women’s Development 163 Women’s Development Programs in International Federations the Impact they are having on their Stakeholders

Elizabeth FULTON & Jennifer SMITH MAGUIRE

Chapter 10 – Integrity Management 191 Integrity Management in International Sport Federations. Status Quo and Future Perspectives

Gianluca SIRACUSANO & Dawn AQUILINA

Chapter 11 – Mediation 219 CAS Mediation. Potential and Future Development

Cinthia LÉVY & Juan Carlos LANDROVE

About the Contributors 234

About the AISTS 238

AISTS International Academy of Sports Science and Technology 4

Foreword

Collected Insights from the Field of Sport Governance and Ethics

Juan Carlos LANDROVE & Geert HENDRIKS

AISTS International Academy of Sports Science and Technology 7 Governance and Ethics

‘Sometimes, it’s not enough just to change laws. You’ve got to change hearts.’ And sports has a way, sometimes, of changing hearts in a way that politics or business doesn’t.’

Barack OBAMA (44th President of the United States)

8 AISTS International Academy of Sports Science and Technology This book contains articles written by both members of the AISTS Scientiﬁc Committee as well as former participants of the AISTS Master in Advanced Studies of Sport Administration. It serves the purpose of warmly thanking Margareta for her countless investment in the long term and as a humble gesture of gratitude.

The topic that naturally came as “fil rouge” among the following articles is governance. Governance in sport is defined as “The framework and culture within which a sports body sets policy, delivers its strategic objectives, engages with stakeholders, monitors performance, Foreword evaluates and manages risk and reports to its constituents on its activities and Professor Margareta Baddeley recently progress including the delivery of retired from her full-time professorship effective, sustainable and proportionate at Geneva University School of Law and sports policy and regulation.”3 ceased teaching within the frame of AISTS programmes. She was part of the The current governance challenges in pioneering team who had the challenging sport cannot be resolved in isolation idea of bringing to life and developing and the need for good governance from scratch an international Master of in sport is more urgent than ever as Advanced Studies in the field of Sport information floods and public scrutiny Administration under the aegis of AISTS of organisations’ behaviour continue back in 20031. The multidisciplinary to intensify. Governance is therefore a programme grew up quickly in size and multidisciplinary topic that, when taught quality and is nowadays classified the to the (future leaders of) the sports best masters in the world in its field2. industry, should be viewed from different Margareta ensured, through both her angles. Better governance in sport goes teaching and numerous publications, the beyond regulations, guidelines and laws. steady growth of the programme’s fame It requires a change in the ethics and in relation to legal concepts taught to a attitude of all actors involved, or as former public comprising mostly non-lawyers. US President Obama said during his last event at the White House:

1 Among the initial team were also Jean-Loup “Sometimes, it’s not enough to change Chappelet, Gérald Gremion,Daniel Oyon, Francis- Luc Perret, Laurent Rivier and Claude Stricker laws. You’ve got the change the hearts”. 2 EdUniversal Best Masters Ranking Sport 3 EU’s Expert Group on Good Governance, Management 2015 - 2016 Principles of Good Governance, 2013

AISTS International Academy of Sports Science and Technology 9

Chapter 1 – Switzerland

Switzerland’s Responsibility in the Regulation of International Sport

Jean-Loup CHAPPELET

AISTS International Academy of Sports Science and Technology 11 Switzerland’s Responsibility in the Regulation of International Sport

‘Good governance never depends upon laws, but upon the personal qualities of those who govern’

Frank HERBERT (American author)

12 AISTS International Academy of Sports Science and Technology system that are based in Switzerland are Sport in Switzerland subject to Swiss law, in particular articles Competitive sport, professional sport, 60 and subsequent articles of the Swiss elite sport, grassroots sport, leisure sport, Civil Code (governing associations). physical activity and physical education Over the last two decades, however, a all grew massively during the 20th seemingly endless succession of crises Century. In Switzerland, for example, 74% has rocked this system to its core. These of the population now claim to do some crises, many of which were triggered form of sport or physical activity (Sport by scandals relating to the choice 2014 survey). Consequently, sport is of hosts for major events controlled now a major socio-cultural phenomenon by international sport organisations, in most of the world’s countries and especially world championships and the has taken on great economic and Summer and Winter Olympic Games, political importance. It can even impact are frequently attributed to failures of international relations, as was shown by governance. the ping-pong diplomacy of the 1970s, the boycott of the Moscow Olympics Regulating Sport in in 1980, the emergence of the BRIC countries in the international system, Switzerland and the effect of the 2015 FIFA scandal on Switzerland’s reputation. Many As a 2012 report to the Federal Council stakeholders have contributed to the rise pointed out, whatever the facts of in sport’s popularity, including nation- the matter, cases of corruption and states, intergovernmental organisations, abuses of human rights associated NGOs, the media, sponsors, private with international sport organisations organisations such as fitness centres and and events reflect extremely badly on sports goods manufacturers, and, very Switzerland. What is Switzerland doing importantly, sports federations and clubs. to avoid this criticism and damage to its reputation? What more could it do? And, Around 60 international and European most importantly, how can the country sports federations are based in help resolve these problems and improve Switzerland, having followed in the the regulation of international sport? footsteps of the International Olympic Committee (IOC), which moved its Until now, international sport has been headquarters to Lausanne in 1915. In self-regulating and has fiercely defended fact, the IOC is both the custodian of the the principle of “sport autonomy”. Today, Olympic Games, which, despite recent the limitations of this sport autonomy are criticisms, remains a unique symbol of increasingly apparent with respect to a peaceful international cooperation and wide range of issues that are damaging coexistence, and the de-facto head of the integrity of sport, including: doping, a system for overseeing world sport match-fixing and hooliganism, as well as that dates back to the Belle-Époque. corruption by sport’s administrators. The numerous organisations within this

AISTS International Academy of Sports Science and Technology 13 Switzerland’s Responsibility in the Regulation of International Sport

Since 1970, when an article referring superseded a similar convention drawn directly to sport was added to up by the Council of Europe, which Switzerland’s constitution, the Federal Switzerland had ratified in 1989. It led Council has taken numerous actions to the creation in 2008 of Antidoping to address issues arising in the world Suisse, the Swiss national anti-doping of sport. The most significant of these organisation. actions are listed below (in chronological • 2011: introduction of a new federal order): law (which came into effect in 2012) to encourage sport and physical activity. • 1981: approval of a federal order Chapter 5 of the law is entitled “Ethics recognising the IOC’s “specific and Safety”. character as an international institution”. In 2000, this federal order • 2014: revision to the law on money was turned into an agreement between laundering (article 2c) in order to add the Swiss federal government and the international sport’s most senior IOC, confirming the IOC’s exemption executives to the list of “politically from income tax and its right to recruit exposed persons” (PPE). As a result, an unlimited number of foreign staff banks now have to monitor these with no restrictions on their nationality. executives’ bank accounts. • 1989: ratification of the European • 2015: revision of the Criminal Code Convention on Violence and (articles 322.8 and 322.9 CP) to allow Misbehaviour by Spectators at Sports cases of serious private corruption to Events (Council of Europe). be prosecuted without charges being brought by one of the parties. This is • 2000: addition of a new article (article in addition to existing articles covering: 11) to the 1972 federal law on sport, fraud (article 138 CP), criminal making trafficking doping products (but mismanagement (article 158 CP), not their use) a penal offence (under and money laundering (article 305bis the jurisdiction of the cantons). CP) that have already been used to • 2005: amendment to the Civil Code bring cases against sport executives. (article 69b) making it mandatory Moreover, article 102.2 CP allows for associations of a certain size criminal proceedings to be brought to have their accounts audited by against organisations that do not take external auditors. The law applies to all necessary measures to combat associations that meet at least two private corruption. Switzerland has also of the following criteria: total assets ratified the UN’s, OECD’s and Council of at least CHF10 million, turnover of of Europe’s conventions on active and at least CHF20 million, and average passive corruption. annual staffing level of more than 50 • 2014: signature of (and intention employees. to ratify) the Council of Europe • 2005: ratification of the UNESCO Convention on the Manipulation of International Convention against Sports Competitions in Maggligen/ Doping in Sport. This convention Macolin.

14 AISTS International Academy of Sports Science and Technology • 2016-17: revision of the law on organisations could use to audit their gambling (as proposed by the Federal activities, especially their finances and the Council in 2015) in order to make redistribution of funds to their members. match-fixing a criminal offence and to This mechanism could be based on: compel sports organisations to pass 1) National public auditors, such as on to the authorities any information the Swiss Federal Audit Office, they may have concerning the which already audits international manipulation of competitions in their organisations such as the WIPO and sport (articles 63.2 and 63.3). WHO, or • 2016: parliamentary discussion of MP Cédric Wermuth’s request 2) An independent internal body, such that the Federal Council prepare as the World Bank Inspection Panel a parliamentary report on the (WBIP), which audits some World consequences “of modifying the Bank projects, or legal form of major international sport federations or of creating a specific 3) A specific body, such as the World status for them” (following the 2015 Anti-Doping Agency (WADA), the FIFA scandal). Court of Arbitration for Sport (CAS) • A law to protect whistleblowers is due or the ZEWO Foundation, which to be presented to parliament in 2017. monitors and certifies charities. • Following the acceptance of a popular International Convention initiative in April 2016, a referendum on Swiss multinational companies’ duty Drafting and tabling an international of care with respect to human rights, convention to prevent misconduct and inspired by United Nations guidelines, promote “Sustainable, Addiction-free, will take place in 2018 or 2019. Fair and Ethical (SAFE)” sport. In a similar way that the Geneva Conventions gave birth to international humanitarian law, Future Considerations this convention (which could be entitled As host to numerous international the “Lausanne Convention”) could bring sports organisations, Switzerland could together existing conventions covering take several further measures, either sport, in order to create an international by modifying national laws or through law for sport. It could also award the intergovernmental conventions. Such IOC a similar status to the International measures could include: Committee of the Red Cross (a non-profit association under Swiss law), thereby Audit Mechanism giving it a legal mandate to regulate international sport and ensure that sports Setting up a voluntary, independent audit events respect human rights and the mechanism that international sports environment.

AISTS International Academy of Sports Science and Technology 15 Switzerland’s Responsibility in the Regulation of International Sport

References

Unofﬁcial English translations of many important Swiss laws (including the Civil Code and Criminal Code) can be found at: www.englishforum.ch/other- general/100861-swiss-laws-legislation- english-translations.html

Sport Suisse (2014) Activités et consommation sportives de la population Suisse, Macolin: Ofﬁce fédéral du sport. www.sportobs.ch/ﬁleadmin/ sportobs-dateien/Downloads/Sport_ Schweiz_2014_f.pdf

Baddeley, Margareta (1994) L’association sportive face au droit, Les limites de son autonomie, Bâle : Helbing & Lichtenhahn. 2016-17: revision of the law on gambing (as proposed by the Federal Council in 2015) in order to make match-ﬁxing a criminal offence and to compel

16 AISTS International Academy of Sports Science and Technology AISTS International Academy of Sports Science and Technology 17

Chapter 2 – Corporate Governance

Corporate Governance Challenges for International Sports Federations

Giovanni Battista DERCHI, Antonio DAVILA & Daniel OYON

AISTS International Academy of Sports Science and Technology 19 Corporate Governance:Governance Challenges for International Sports Federations

‘Corporate governance is about intellectual honesty and not just sticking to rules and regulations.’

Mervyn KING (British Economist)

20 AISTS International Academy of Sports Science and Technology Abstract the major risks. Over the last 30 years, corporate The IOC and FIFA have grown governance has thus become a considerably over the past 30 years dominant field of research explored by and have reached a global dimension. many academic disciplines. To date, the These organisations, legally formed as main emphasis has been on for-profit associations, have not always evolved organisations and, more particularly, their organisational structures and on those listed on the stock exchange, governance systems accordingly. For a partly because of the stakes involved long time, the IOC and FIFA have applied but also because of the separation a basic sports rule: never change a between ownership and control. When winning team. The financial scandals, owners and managers are different however, have reminded us of the realities people agency costs arise due to the of organisational development, requiring potential misalignment of interests the establishment of organisational between shareholders (principals) and structures adapted to address the new officers (agents). To date, results from demands of sports. This article attempts research have developed the state of to highlight some of the characteristics of knowledge and contributed to improve these large, not-for-profit organisations the governance of organisations, as well that are still neglected by governance as managerial practices. research. For various reasons, the governance Introduction of other forms of organisations such as family businesses, non-profit In an increasingly competitive organisations, governmental and environment, corporate governance non-governmental entities, has not yet has become a fundamental topic. attracted the attention they deserve. Strategic and operational errors, such Recent scandals involving the Fédération as the Volkswagen fraud, the Fukushima Internationale de Football Association accident or the manipulation of financial (FIFA) and the International Association statements by Lehmann Brothers, can of Athletics Federation (IAAF) have, cause considerable economic, social however, aroused interest in this type and environmental damage. They can of organisation and demonstrate the also enable executives, customers, importance of governance to the survival competitors, suppliers and other partners and prosperity of the organisation. The to exploit the situation to their advantage purpose of this paper is to examine and gain an undue access to a source the specific governance context of of value on an occasional or permanent international sports federations. basis. Organisations must put in place governance mechanisms enabling them both to discover and exploit the Corporate Governance opportunities that arise and to manage Larcker and Tayan (2015: 7) defines

AISTS International Academy of Sports Science and Technology 21 Corporate Governance:Governance Challenges for International Sports Federations

corporate governance as “the also depends on the orientation of the collection of control mechanisms that organisation and its role in society. In a an organisation adopts in order to market economy based on the allocation prevent or dissuade potentially self- of capital to the most profitable sources interested managers from engaging in of value, the governance system of a for- activities detrimental to the welfare of profit organisation is to align the interests shareholders and stakeholders”. This of the managers with the interests of set of mechanisms forms the system of the shareholders and maximize their governance represented in Appendix wealth (Jensen & Meckling, 1976). As a I. In its most basic form, corporate result, a non-profit organisation will have governance relies primarily on the actions a governance system that is structured of a board of directors in charge of differently. It follows that a single, generic supervising executives and on auditors system cannot satisfy all types of who must attest to the reliability of the organisation: ‘one size does not fit all’. financial statements. In a more elaborated version, shareholders, creditors, unions, As can be seen in Exhibit 1, external customers, analysts, the media, and factors related to the environment regulators can play a very important role of organisations also influence the in the governance of organisations. architecture and effectiveness of the governance system. The efficiency of From an economic point of view, capital markets, the legal tradition, the the key idea behind the choice of regulatory enforcement that enhances governance mechanisms is that the the application of law, the reliability of costs of implementing these mechanisms accounting standards, and the societal will be offset by lower agency costs, and cultural values play a fundamental in other words, better alignment of role on influencing the behaviour of the behaviour of managers with the managers. These factors function as interests of shareholders. Empirical external governance mechanisms and research in publicly listed firms has complement the mechanisms that shown a strong relationship between companies must or can implement. the quality of governance and economic returns. The governance structure for Putting in place the right combination non-profit organisations has received of internal governance mechanisms less attention and the optimum is so that complement those of the corporate far based on extrapolating research in environment is not the only challenge that for-profit organisations. The choice of organisations face. Good governance governance mechanisms thus requires also requires respect for basic operating a good managerial appreciation in order conditions such as the independence of to put in place the appropriate corporate key governance actors such as: auditors, governance system. analysts, rating agencies, regulators, legal bodies, and governments. Independence According to Larcker and Tayan (2015), is often the cornerstone of any system of the structure of the governance system governance.

22 AISTS International Academy of Sports Science and Technology International sports federations such as complicates the situation. One of the the International Olympic Committee consequences of this is that it does (IOC), the Fédération Internationale not have a supreme body composed de Football Association (FIFA) and the of representatives concerned with Union of European Football Associations maintaining the financial value of (UEFA) are special organisations in many the organisation. Property generally respects, making their governance produces favourable effects on the difficult. They are characterised, in management of tangible or intangible particular, by a lack of owners, a broad assets. Men and women pay special mission with hard-to-measure objectives, attention to what they have; they a legal status that might not be optimal usually make good use of the goods anymore given their increasing economic they own or want to positively develop and social importance, a composition the organisation in which they have of their governance bodies that need to ownership rights. The fact that the IOC, be responsive to the new demands, a FIFA or UEFA do not have owners does dominant position in their field, and an not create the same pressure from extreme internationalisation of their field the supreme body (principal) over the of activity and structures. (Van Puyvelde executives (agent). et al., 2012). The supreme body of the IOC is the Session of the members. Consisting The Absence of of 115 people, it brings together 45 Owners representatives of active athletes, international federations and national The IOC and FIFA are characterised by Olympic committees and 70 co-opted the fact that these institutions do not personalities. Due to the importance belong to anyone: they are not-for-profit of the IOC in the world, becoming a associations of individuals and entities member of the IOC is a highly sought- created to promote one or more sport after function. The members are all aware disciplines through the organisation of of their privileges and this accentuates international competitions. For the IOC the sense of responsibility. Being among and FIFA, the flagship competitions are, the very narrow circle of the IOC’s 115 respectively, the Olympic Games and the members is a unique honour, forcing World Cup of Football, which take place every member to be deeply concerned every four years. about the future of such an institution. No IOC member, however, holds a share of The members of these associations do the IOC, as it actually does not belong to not hold ownership rights but, instead, anybody. social rights allowing them to influence the strategy and the organisational FIFA is in a similar situation. The structure of these associations. From the Congress is the supreme body of the governance perspective, the absence association and brings together the of owners is not without effect and 209 delegates of the national football

AISTS International Academy of Sports Science and Technology 23 Corporate Governance:Governance Challenges for International Sports Federations

federations recognised by FIFA. A mission that is hard to translate into Undoubtedly, the delegates feel very specific and measurable objectives honoured with such a function and the makes the delegation of the mission by future of FIFA certainly is close to their the principal (members) to the agent hearts, especially those from small (executives) extremely difficult, if not national federations heavily dependent impossible. This is particularly the case on the revenues distributed by FIFA. No when the elements of the mission leave delegate, however, has this ownership a large margin of interpretation and may relationship conferred by possession. As appear to be contradictory. The lack of a result, both the IOC and FIFA cannot precision and ambiguities of the mission rely on a governance structure arising sometimes lead to a reversal of control from ownership of the principal (owners) where the agent (executives) takes to ensure that the agent (officers) takes power over the principal (members). In great care of the institution he has charge the case of FIFA, it is undeniable that of. President Sepp Blatter had succeeded over time in gaining control over a large part of the delegates of small national A Broad Mission with football federations by granting them Hard to Measure significant, and continually increasing, financial contributions. In such a situation, Objectives some members of Congress lost their independence vis-à-vis President Blatter For international sports federations legally and were no longer able to exercise formed as not-for-profit associations, their oversight role. In addition, the good governance is not about extraordinary development of revenues maximising a measurable objective from the sale of television rights for the such as financial results, but of fulfilling Football World Cup and sponsorship, a broad mission while respecting certain allowed President Blatter to propose constraints and diverse expectations generous redistributions to national from its members. federations and broad support for many development programmes. Under his According to the August 2, 2016 version presidency, between 1998 and 2015, of the Olympic Charter (IOC, 2015), FIFA’s revenues increased from CHF the mission of the IOC is to promote 332 million for the 1995-1998 period to Olympism throughout the world and to CHF 5’718 million for 2011 to 2014. FIFA’s lead the Olympic movement. The Charter equity increased also from CHF 94 million also specifies in the form of 16 points in 2003 to over CHF 1’340 million in 2015 the role of the IOC (Appendix II). Like the (FIFA, 2013;2015). With such financial IOC, the objectives of FIFA (FIFA, 2016) results, no one could say that FIFA was are also multiple and cover a wide range not fulfilling its mission and President of activities aimed at the development Blatter easily secured his re-election and promotion of football worldwide despite the potential existence of many (Appendix III). governance problems.

24 AISTS International Academy of Sports Science and Technology remuneration), auditing and adoption of The Legal Form of an accounting framework. International Sports In such a liberal context, associations Federations tend to adopt minimum rules of governance giving maximum freedom to The legal form of international sport the governing bodies, often encouraging federations organised as an association the reversal of control between the under Swiss law also leaves a great deal principal and the agent. Both the IOC and of freedom in terms of governance. The FIFA have not been zealous in this regard general assembly of the members is the and have long been limited to a system main supervisory body of executives. of elementary governance which does Except for the keeping of financial not facilitate the exercise of high-level accounts and their auditing, Articles oversight by the members of the Session 60 et seq. of the Swiss Civil Code do and the Congress. not impose any specific governance mechanism to associations and let them To date, neither the IOC nor FIFA define their organisational arrangements have officially recognised the Swiss in their statutes and internal operating governance frameworks (Swiss Code of directives. Best Practice of Corporate Governance, the SWX Directive on Information Basically, an association is not subject Relating to Corporate Governance or to either the Swiss Code of Best the 2