Sportorganisaties | sportmanagement24

MANAGEMENT

Intro

Governance, and more specifically good governance, is a hot topic on the (inter)national sports agenda. This is partly due to numerous (recent) scandals that have confronted the sports landscape worldwide and across sports (Geeraert & Drieskens, 2016). Fraud scandals were also investigated within the PrOFS project, including the case of Clean Hands*, the Maestro** case and the Zheyun Ye*** case.

In Flanders, a lot of work has already been done on good governance in the sports sector. For example, there is the Good Governance Code for Flemish Sports Federations. Good governance is an important building block in the prevention of sports-related fraud, as it allows appropriate responses to be given to challenges - and therefore also fraud - that various sports organizations face (Geeraert & Drieskens, 2016). Within PrOFS we investigated vulnerabilities at organizational level and formulated recommendations for managers, board members and policy makers. Want to know more about this? Read more!

Government at the level of sports organizations

Sports-related fraud rarely takes place in a social vacuum. Usually it happens within a specific organizational context (e.g., sports club, sports federation). This makes (good) governance all the more important in the context of fraud prevention. The PrOFS research focused on the formal and informal context of sports organizations. We investigated which vulnerabilities can arise in both contexts. PrOFS also looked at ways in which sports organizations can protect themselves against sports-related fraud.

Formal context of sports organizations

The formal context of sports organizations refers to official and standardized processes that shape governance and day-to-day operations. The formal context refers, among other things, to control mechanisms. This can range from ethical codes to external audits and a whistleblower policy.

What are the vulnerabilities in the formal context of sports organizations?

The formal context includes the control mechanisms or ethics programs. These consist of various branches (including ethical code, internal regulations, training, sanctioning policy, whistleblowing policy, etc.). (Sports) organizations that implement ethical programs to a large extent are less confronted with unethical behavior and fraud (Kaptein, 2015). However, the effectiveness of ethics programs in sports organizations is limited by the extent to which there is support for these ethics programs. Furthermore, PrOFS research shows that ethics programs have an indirect role in the prevention of fraud. However, this does not mean that they are unimportant.

Other vulnerabilities in the formal context may relate to organizational capacity, such as financial capacity, which refers to the ability of sport organizations to meet their obligations and remain financially sound (Hall et al., 2003). But this also includes personnel capacity, planning capacity and network capacity (Wicker et al., 2022).

ProOFS Recommendations

ProOFS research shows that it is not one measure, but the combination of different control measures that is most effective in combating fraud. Examples of control mechanisms are:

Internal policies and procedures provide guidelines for acceptable behavior and help prevent fraud. Regular updates and communication by the management of sports organizations are essential for their effectiveness.
Internal controls can reduce the risk of fraud by creating checks and balances that make it difficult for individuals to commit fraud without being detected.
Internal audits independently evaluate the effectiveness of internal controls and governance processes within a sports organization. Internal audits help identify vulnerabilities and provide recommendations to detect and prevent fraud.
External audits independently assess an organization's financial statements and internal controls. They provide an objective view of financial health and possible fraud risks.
A whistleblowing policy (e.g. at the level of a sports federation) enables people to report confidentially and without fear of retaliation. A whistleblowing policy can promote the detection and tackling of fraud.
An API (at the level of sports clubs) can serve as an internal reporting point to report unethical behavior - including fraud.
Providing members with knowledge and skills about recognizing and preventing fraud. Informed members are better able to recognize warning signs of fraud and know how to respond, improving the organization's overall fraud prevention capabilities.
(Public) initiatives aimed at increasing knowledge of fraud risks. Such campaigns can make society aware of the threats and consequences of fraud.
A set of guidelines that establish norms and values for the behavior of members, coaches and management, etc. Create support for the code of ethics. An ethical code is only useful if the people in the sports club also know what it says, have a feeling for it, and support the principles. Make sure that the managers within the club also promote the values in their daily actions.

TOOL ALERT

Within the PrOFS project, an e-learning and self-evaluation instrument was developed for sports club directors to recognize and prevent match fixing and black money. Click here for more info!

Informal context of sports organizations

The informal context of a sports organization refers to all cultural characteristics of this organization, including its ethical culture and ethical leadership.

The concept of ethical culture points to the capacity of an organization to enforce ethical behavior among its members (Kaptein, 2008). In addition, ethical leadership is important to promote an ethical culture within a sports organization. Ethical leadership is generally understood as demonstrating normatively appropriate behavior through one's own behavior, actions and in interpersonal relationships (Brown et al., 2005).

PrOFS research shows that relying solely on control mechanisms is not sufficient in the prevention of sports-related fraud. An ethical culture can compensate for a lack of management controls, but control mechanisms cannot compensate for a lack of ethical culture.

What are the vulnerabilities in the informal context of sports organizations?

Cultural factors can make sports organizations vulnerable to fraud, because culture influences the extent to which fraudulent behavior is accepted, socialized and internalized within a (sports) organization (Geeraert, 2018). PrOFS research showed that there is a direct link between ethical cultures and sports-related fraud. The higher the ethical culture is rated, the fewer cases of fraud are reported.

ProOFS Recommendations

According to Kaptein (2008, 2020), ethical cultures consist of several pillars. It is therefore these pillars that must be focused on in the prevention of fraud.

Leaders within the sports club must actively promote the code of ethics in their daily actions, so that values do not just remain on paper, but are visible in practice.
Provide sufficient resources, such as time and expertise, so that members of the sports club can achieve their goals in a responsible and ethical manner.
Provide sufficient time, resources and clear guidelines to ensure that members can achieve their goals and act ethically in a realistic and responsible way.
Develop clear and well-communicated disciplinary regulations in which the consequences of violating the ethical code or rules are unambiguously laid down and can be applied.
Ensure that all rules and expectations in the code of ethics and disciplinary regulations are communicated clearly and unambiguously to all members of the sports club. This way everyone is aware of what is expected of them.
Provide a space where ethical issues such as fraud can be discussed openly, so that members can also share their concerns in a safe environment without fear of negative consequences.
Communicate in a transparent manner about decisions, rules and actions within the sports club, including the consequences of fraud or unethical behavior, so that everyone knows what is happening and why.

TOOL ALERT

Within the PrOFS project, an e-learning and self-evaluation instrument was developed for sports club directors to recognize and prevent match fixing and black money. Click here for more info!