Wednesday 23 January 2019

For proper governance at OCI, the entire board must now step down

Pat Hickey has stepped aside temporarily as OCI president Photo: Steve Humphreys
Pat Hickey has stepped aside temporarily as OCI president Photo: Steve Humphreys
Martina Devlin

Martina Devlin

You could be forgiven for imagining that corporate governance is an outlandish concept that crash-landed on Planet Sport in August, when the Olympic Council of Ireland (OCI) collided with Rio 2016.

Accountability? Strategic planning? Robust internal systems? Clear demarcation of power? Leave that to the wimps. Or so the dismissive attitude stemming from one of Ireland's major sporting bodies suggests.

But corporate governance - a transparent control framework under which organisations operate - is internationally accepted as necessary to safeguard both a business and its stakeholders. Consequently, the wonder isn't that the governance-free OCI is stretched out with broken limbs in the emergency ward. It's that the fault lines in the organisation didn't lead to problems spilling into the public arena before now.

A draft report by Deloitte into the way the OCI is directed paints a picture of a body with shoddy standards. Deficits include no term limits for board members, a lack of transparency, and unsatisfactory oversight of key functions such as auditing and remuneration arrangements.

The report, seen by the 'Irish Times' before publication next week, recommends no member should serve for more than two four-year terms to mitigate against over-dominant leadership.

Which leads us to Pat Hickey, kingpin for almost 30 years, although he has stepped aside temporarily as OCI president while on bail in Brazil facing allegations of ticket-touting, which he rejects. Absolute monarchs have ruled for shorter terms than him. Such an extensive span is contrary to best practice because it allows for unfettered decision-making powers, and prevents the emergence of new blood to refresh an organisation.

But we knew that before he flew to Brazil. So why has it taken a ticket-scalping scandal, lowering Ireland's good name in the sporting world, to focus attention on the OCI's slack approach to governance?

This is a failure hidden in plain sight.

Mr Hickey's protracted reign has been in the public domain, as has the tenure of other board members. (Five of them have been in situ for 19 years or more.) Mr Hickey, we must remember, denies all criminal charges in Brazil and should be regarded as innocent unless the case against him is proven.

From the tenor of the Deloitte report, it would appear the OCI has a calcified board unable or unwilling to challenge an over-dominant president. They are jointly responsible for various failures, including that lack of transparency outlined in the report. The bottom line is that good governance is the board's responsibility. Its members have not fulfilled their duty and every last one of them must step down. Their performance has been abysmal. Ignorance is no defence for poor stewardship.

OCI vice-president John Delaney and honorary treasurer Kevin Kilty both resigned this week, in a move which must be viewed in the context of the Deloitte report. Their former colleagues should follow this lead rather than delay the inevitable.

Not only is the governance shortfall on the executive committee's watch problematic - so, too, is the absence of any strategic plan laid out, with targets set and their success or otherwise monitored. This matters for the wellbeing of the organisation: its vision and mission for sport in Ireland. The strategic plan's non-existence will be harder to rectify than the governance failures.

Poor governance has an insidious impact, however. It affects the health and reputation of an organisation. The value of good governance is recognised widely as contributing to an efficient and effective organisation.

Can this really be a revelation to the OCI board? I accept they are volunteers, but theirs is a position of honour which must be treated seriously. When it isn't, the fallout is potentially catastrophic.

Poor governance damages not only individual bodies but countries. Ireland's status has been undermined internationally by the flaky way in which the OCI saw fit to operate.

Why did nobody on that executive committee raise a red flag? They must have sat in meetings where they had doubts about what they were hearing. Or not hearing. Did they see decisions pushed through without adequate discussion? Did they ask for expert external advice, as is their entitlement, if ever they were unsure about something?

Transparency and accountability must be the norm. The highest standards of integrity have to apply. Quite rightly, the public has expectations about good governance, especially where tax revenues are involved. Taxpayers have given €1.7m in funding to the OCI over the past four years, €520,000 last year alone.

The importance of corporate governance was mentioned by Hillary Clinton on the presidency campaign trail, while many countries, including Germany, France and Norway, have enacted legislation insisting on boardroom diversity to contribute to decision-making. The OCI is now a tarnished brand. That's the reality. Action needs to be taken to restore its reputation - and step one is the replacement of the entire board.

A clean sweep is needed. No-one associated with the Hickey era can remain.

New members must not only be independent; they cannot be chosen by the head of the executive committee because that implies a debt to the person appointing them. As part of their job to restore public trust, they will need to create a working environment that emphasises ethical behaviour within the organisation. After all, they define the organisation's values.

In addition, rigorous internal systems must be put in place - these enable an organisation to grow stronger with clear delineation of roles, and also help to prevent mistakes being made which might bring a body into disrepute. As for Mr Hickey, irrespective of the charges he has pledged himself to fight, it is impossible for him to continue as president. The report is a damning indictment of his leadership. The decision to bow out cannot be left to him - he must be removed.

The tectonic plates of corporate governance have shifted in the 28 years since he assumed the OCI presidency. Currently, a black cloud engulfs the sporting body and will not disperse until the OCI shows it is genuine about best practice.

An emphasis on good governance is here to stay. This is no optional extra, box-ticking exercise or passing fad.

Martina Devlin holds a diploma in Company Direction from the Institute of Directors

Irish Independent

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