Integrity in Sports and Business
As part of their Integrity in the Workplace series, PKF Australia recently hosted a forum on the topic of ‘Integrity in Sports and Business’. Held in Brisbane and chaired by PKF’s Forensic and Risk Services Managing Director David Morgan, the forum was our second on this topic after the one held in Sydney in early May. This forum discussed the topic of illegal activities in the sports industry, and what we can do to improve integrity.
Whether it is in a country that allows it or not, betting on sports is a common pastime for people around the world. In jurisdictions where betting is illegal, it brings with it unwanted consequences such as organised crime. In these countries, sports players and civilians alike can be harmed.
While issues as serious as corruption are well known in the sports industry, it is not something that corporate organisations often have to deal with. Furthermore, the breadth and depth of integrity related issues, particularly emerging issues, are still being grappled with by corporates and the greater public still don’t fully understand some of these issues.
The misconception of the role of the auditor
Auditing is still seen as critical when it comes to managing fraud, theft and other integrity related issues. However, the audit process is focused on the financial statements and the way that people conduct misconduct inside the workplace is wide-ranging, often non-financial and is therefore not the likely to ‘fall in the auditor’s lap.'
This is particularly the case with sporting organisations that employ professional athletes. There are many other corporate governance mechanisms, such as effective reporting frameworks (whistle-blower hotlines), education programs, integrity sub-committees, etc that can enhance the detection of corruption in the workplace.
In Australia, depending on the size and the maturity of the sports corporation, they may or may not have a subcommittee dedicated to integrity. We recommend that sporting organisations that may be influenced by sports betting implement an integrity sub-committee and that it have the same status as the audit and risk committee. The members of a sporting body integrity sub-committee do not necessarily have to be directors or employees of the sporting organisation. Specialist knowledge and experience is invaluable. In fact, we know of one integrity sub-committee that has members that are detectives of the Australian Federal Police.
Managing your profile
As a professional sports player or a corporate professional, effectively managing your public profile is essential. Even for those in corporate roles, it’s important to understand the risk that who you associate with and where you are seen can be construed to mean something that can be detrimental to your profile. According to police, criminal figures are known to appear at professional sports games – perhaps in the room after the game, with a view to forming a relationship with one or more players. Photographs of sports players associating with known criminal figures is detrimental to the sports corporation as well as the individual.
As an organisation, the higher the profile of the sports player and the sport, the harder it will fall. Especially in today’s media landscape, every element of your public profile must be monitored; including social media channels.
Even in situations where businesses have a team of crisis management professionals, such as Cricket Australia, it is not always clear or easy for a business to respond quickly and appropriately. Whether stories are fake, or just a rumour, it’s clear that professionals must be prepared to be able to deal with these issues.
Today the news cycle goes quickly, but at the same time the exposure can be so much higher, and the lead time between an event and being in the media is much shorter.
For businesses, the costs of monitoring can be very high, but in some cases, crisis management is being built into the business structure and billing plan, and this is the path that the industry is moving towards.
In this day and age, these issues are not just left to the risk management team – it is essential to ensure that the responsibility is with all patrons, employees and CEOs. We need to continue building into the culture of sports, and into the culture of corporates, the sense that it is okay for individuals to be a whistleblower on integrity related issues. Building up the community to support this culture will help to make the Australian sport industry and the corporate world stronger and will benefit all who are involved.
As a professional in the sports industry, it can be difficult to know how to protect yourself. However, being prepared and arming yourself with accurate information will go a long way in helping you to make the right business decisions.