FIFA, the peak governing body for Association Football, has recently caused a stir by removing references to corruption from their latest version of their code of ethics (Code).
FIFA has been frequently criticised in the past for unethical behaviour and has been the subject of numerous scandals, such as that involving the financial misconduct of its former president, Mr Sepp Blatter.
As shown by FIFA, the alteration or failure to uphold the Code has serious effects on external perceptions of its already maligned corporate governance methods.
Why a Code of Conduct Matters
Codes of conduct are formal documents that outline:
(a) the values and principles that the company operates under;
(b) the general professional standards that all employees must observe; and
(c) the processes and mechanisms for ensuring the values and standards are followed.
Putting to paper the principles that the company stands for and linking them to the people involved in their operation is crucial for the understanding of its members and directors. It can then be used as a reference for decision making by all members of the organisation.
A code of conduct also signals to external parties that the organisation has given thought to its behaviour and risk management strategy.
FIFA’s New Code
The most notable amendment to the Code has been the removal of the word ‘corruption’ from a clause previously relating to bribery and corruption. American authorities had previously prosecuted several senior FIFA board members in connection with racketeering, wire fraud and money laundering (among others) in 2015. Corruption is not limited to bribery.
Another significant change is the introduction of defamation-based infringements for any public statements of a defamatory nature against FIFA, with bans ranging from two to five years from any football related activities. With no examples provided and no scope indicated, it may be used as a powerful threat against members that criticise FIFA.
The new Code has introduced several other new articles and concepts. These include:
(d) a specific match fixing clause, signalling a crack down on match manipulation in particular;
(e) minimum sanctions for bribery;
(f) a limitation period for bribery, match manipulation and financial misconduct, such that prosecution of breaches may not occur after 10 years following the breach, where previously there was no time limit; and
(g) decisions made by FIFA’s ethics committee regarding unscrupulous member conduct may now be appealed directly to the international Court of Arbitration for Sport.
In a recent press release, FIFA contends that anti-corruption guidelines have not been substantively removed from the Code, and that this is a slight wording change that does not impact the infringements. But it is bemusing that FIFA would decide to remove references to the word ‘corruption’ given its tumultuous history with the concept of corruption in general. The introduction of a defamation clause could also be perceived as FIFA attempting to silence dissidents, particularly if they are criticised for corruption or poor corporate governance.
Therefore, while FIFA president Mr Gianni Infantino has promised a more democratic, transparent and honest organisation, outside perceptions of the effectiveness of the Code and FIFA as a whole will likely remain negative.
Codes of conduct or ethics are important tools for good corporate governance for any company or incorporated association, regardless of its size.
While they aren’t mandatory and in some cases are not legally binding, they provide important guidelines that the company will use to self-regulate for compliance and risk management and external stakeholders to judge their performance and behaviour.