Could Regulation Make Sport Better?

Sport has been dragged through the mud twice in the last three years, first with the scandals of the Olympic Council under Pat Hickey and of late with the FAI and a number of ongoing investigations into financial practice and management.

For an activity which is based so much on a strict set of rules and adherence to them in order to make sport function, that’s not a great record.

One of the great strengths of sport in this country is the amateur and volunteer base upon which its administration is built. It is also a source of potential weakness.

Sport Ireland is responsible for the distribution of Government funding to sport through the multitude of governing bodies and each of those holds their own units and clubs to account in terms of governance but is the net stretched too wide for what remains at heart a self-regulating sector?

And is that good enough to avoid more of the same challenges that have been presented over the past three years?

Over the past few days, away from the continuous treadmill of action and reaction we have considered these questions and spoken at length with Dennis O’Connor from 2 Into 3 whose personal interest and business sit across sport and the charity sector.

Parallels

The parallels between what has happened in sport and what happened in the charity sector a number of years before are obvious if you want to look for them.

Sport sits now in a position where charity previously found itself, at least in terms of trust.

Everybody knows that the people involved are generally doing an incredible amount of good work in important areas of health, diversity, integration and the way in which our society sees itself.

But are the systems in place to enable them to do that and know rather than think they are doing the right things in terms of governance?

“2into3 has worked and is now working with a range of sports at National, Regional and Club level across the Island of Ireland,” O’Connor told us.

“The rest of our work is with the Charity Sector and the current scandal at the FAI has parallels with a number that occurred in the Charity sector in recent years.”

“The Charity sector’s response can, I think, point the way forward for Sport.”

“In 2013, the Charity sector was rocked by failures of governance and management at two long-established and very reputable organisations that were providing a high-quality service, on behalf or instead of the State, to people with disabilities.”

“The Central Remedial Clinic (CRC) and The Rehab Group were both mired in controversies that have similarities in terms of public opinion and Government oversight as those faces by the OCI and the FAI.”

“The circumstances were different but the lessons learned can be shared.”

“Public donations and state funds were used for administrative areas seen as being out of line with their intended purpose.”

“In both organisations, management salary levels were out of line with their scale, charity status and with peer organisations engaged in similar work.”

“At the time the charity sector was unregulated because while the establishment of a regulator was provided for in 2009 Charites Act it had not been progressed by Government.”

Absence of Regulation

“Because the absence of regulation was seen as one of the enabling factors that led to the crises at the CRC and Rehab the Charities Regulator was finally established in 2014.”

“It was not at the time, however, given sufficient resources or the mandate for investigation (again despite that being included in 2009 act), until after a further scandal with Console in 2016.

“In the case of CRC and Rehab entirely new boards were appointed and there was a significant overhaul of management with new chief executives, on more appropriate salaries, appointed from outside the organisation but with significant management experience with peer organisations.”

“In the case of Console, the charity was liquidated and its services, which were also high quality, transferred to Pieta House.”

“The Charities Regulator’s mission is to regulate the charity sector in the public interest so as to ensure compliance with the law and support best practice in the governance, management and administration of charities.”

“As of April 2019, some 9,923 charities are now subject to this regulation. According to the latest figures, this is over one-third of the whole not-for-profit sector, the same sector in which sport operates and probably accounts for around 20 per cent of bodies.”

“The Charities Regulator maintains a public register of charitable organisations operating in Ireland and has the power to appoint investigators to investigate the affairs of any charitable organisation.”

“A very important next step will be making mandatory the preparation of accounts to a common and appropriate standard. Legislation on this aspect is due for presentation to the Dáil.”

A Referee

“One of the very significant benefits of regulation is that, in sporting terms, there is a common set of rules and there is, in the person of the regulator and her staff, a referee, a VAR, a citing commissioner, a disciplinary committee or whatever phrase suits your own sport.

“Someone independent is tasked with making sure rules are obeyed and there are sanctions for not following them.”

“Currently, sport is not regulated to the same degree in Ireland.”

“Yes, all companies limited by guarantee (which is a legal form used by both sporting bodies and charities) have to follow rules that are subject to the Director of Corporate Enforcement, but that organisation’s remit is much narrower than that of the charity regulator and is more suited to the oversight of private companies.”

“Sporting bodies and Charities are providing a public benefit. In the case of charities, the regulator has a remit to ensure that a charity is acting in line with its charitable purpose.”

In looking at how that might fit the current sporting landscape more similarities emerge that could have headed off some of our latest issues.

“Under charity law, one cannot be a trustee/director and receive remuneration so charity CEO’s cannot sit on their own Board. Under the Charities Regulator’s guidelines, the maximum term that any person should sit on the same charity board is 9 years. These are only a small sample of the rules that now must be complied with by charities.”

A Set of Rules

What is interesting is that it provides a set of rules that are consistent and subject to enforcement. That is something we can surely understand in sport.

Every game of Gaelic Football, Rugby, Tennis, Cricket or Football is governed by the same rules at every level and is therefore easy to understand and to govern.

“One of the recommended actions to avoid a future scandal like that of the FAI, could be that sport should be regulated,” continued O’Connor.

“Is it worthwhile establishing a new regulator or should consideration be given to extending the remit of the Charities Regulator to include sport?”

“In other developed countries, sport (or at least amateur sport) is already a charitable object and is subject to regulation. This is the case in Northern Ireland, Scotland, Wales and England.”

Charitable Giving

“A further benefit of this would be that donations to sport would benefit from the tax code for charitable giving.”

“In the UK, New Zealand, US and other countries philanthropic giving levels are significantly higher, per capita, than in Ireland, and donations to sport are incentivised under their charity tax codes. The current tax code in Ireland is not as favourable to charitable giving and so would need mirror the UK more closely before this aspect would be wholly positive for sport in Ireland, but is worth consideration.”

Sport’s importance in this country has been well documented. The sport sector has several means of generating income and equates to about 1.4 per cent of GDP, which is €1.9 billion in household spending.”

“This contribution to the economy is seen through household/consumer spending on sport and sport-related goods and service, value-added GDP and in direct and indirect employment. EU funding for sport in Europe is now as big as fishing, forestry and agriculture combined.”

“Fundraised income accounted for approximately €1 Billion in 2016 in Ireland, a tiny two per cent of which went into sport. Sport has not yet tapped into its full philanthropic potential.”

“Sport is more than high performance and winning competitions; sport plays a vital part in community development and social good. Sport is serving the public good. Charitable organisations also serve the public good. Right now, there is much that Sport can learn from the Charity sector.”

We have to get this right.  We cannot afford to let public trust in how sport is run dissipate amid a blaze of headlines and soundbites.  There is too much at stake.


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