How to fix a problem like Fifa

How to fix a problem like Fifa

Who was minding the store?

The arrest of seven Fifa executives in May for corruption at the highest levels of football's world governing body has raised alarm bells worldwide. Sepp Blatter has announced he is stepping down, but remaining as President until at least December. How could this alleged corruption and poor leadership have been allowed to happen, and for many years? Who was overseeing the overseers?

While the magnitude of Fifa's alleged malfeasance and dysfunction is stunning in its longevity and scale, it is a cautionary tale of the potential risks for groups which are governed solely by their members.

These membership organisations come in many forms, such as professional bodies and clubs, associations made up of multiple groups like Fifa, co-op boards of buildings and even parent-teacher associations.

For all organisations of this type, it is important that members hold key roles in their governance, but there is a danger that if they are governed only by members (as they determine the strategy and provide the oversight on its execution), the atmosphere becomes an echo chamber - a place where the self-interest of individual members overrides actions that are best for the organisation as a whole.

Concern over problems that can arise from this governance structure are hardly limited to Fifa. The Co-operative Group, the UK's largest cooperative group which operates a wide range of businesses including supermarkets, a bank, travel agencies, funeral homes and much more, has been forced to transform its governance structure. The change was prompted by a serious crisis in the group's banking business, followed by multiple headline grabbing leadership catastrophes and a badly dented balance sheet.

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