Articles

MHCi MONTHLY FEATURE:

July 2003

Does Corporate Social Responsibility Have a Role in Sport?

Out of Control

Found in his underwear, practically unconscious from drink, in the red light district of Hamburg; arrested in New Caledonia for being drunk and disorderly, having first smashed up loads of gear, including two cars, before stealing another for a high speed ride; finally sacked by his main sponsor for beating up his girlfriend. Rock star? City trader? Soccer hooligan? Nope - but one of the most talented sportsmen in his area, known for radical and revolutionary moves that were pushing his chosen sport's boundaries to the absolute limits[1].

We all need/want heroes and heroines and sport delivers them, indeed thrives on them, as the recent brouhaha over David Beckham's transfer from Manchester Utd shows. The late Mark McCormack, founder of IMG (and indeed the sports management industry), wrote "Business situations always come down to people situations"[2] and from a CSR perspective - although this was not his concern - he was absolutely right because all businesses are about the interaction of their stakeholders[3].

CSR Model Applied[4]

In the case of the very talented but troubled sports star mentioned above, the stakeholders in the company who sponsored him reacted in no uncertain terms:

· the shareholders saw this as completely unacceptable behaviour that was damaging to the company's reputation;

· the management were also very unhappy with his excesses but gave him a last chance: for a six month probationary period, he received no payments from the company but was supplied with material to allow him to train. If he abused alcohol or drugs or became involved in any criminal activity during that six month period, then his contract was to be terminated. Naturally, given the Young Gun's talents, their marketing investment in his profile as well as the value of his niche market signature goods both in their warehouse and distributed around the world, this was not a decision made lightly;

· the employees were divided. Some felt that he was off his head and completely uncontrollable, and others sympathised with him as this was a reflection of his macho skills and edgy appeal to them and young consumers;

· customers (in this case national importers, not end consumers) were unhappy and one even wrote at length to the company demanding that he be sacked immediately not only because his actions were reflecting badly on the company's reputation, but because his actions were perceived as morally wrong in themselves;

· in the wider community the incidents were reported in the press[5], the sportsman was red carded by his sport's association (who also remarked that this was part of the Radical Attitude to be expected from a Young Gun like him) and he was arrested by the police on New Caledonia. He certainly made an impact;

· suppliers: the immediate implications for them were the potential cancellation of orders already being processed, the loss of future orders for this special signature equipment, and the devaluation of stock already delivered to them. Plus there was the danger of brand-name damage which might have impacted on other areas of their production.

The reactions of these stakeholders were based not only on commercial considerations but also on shared values, "the commonsense, often taken-for-granted, beliefs about right and wrong that guide us in our daily lives"[6] . Some of the stakeholders took a very moral approach: "Morality...is a concern for justice, which is making restitution if wrongs are done."[7]

Other sports and CSR

Sport, like any aspect of life, sees anything from minor misdemeanours to criminal acts and sports' organisations are not immune to the troubling ethical issues raised. Indeed, given the very high profile of some organisations, the instinctive reaction to ignore controversy is simply not an option:

The Olympic Games have an ancient history and were re-invented at the start of the last century. Yet the shine of the Games has been tarnished over the past quarter century by political intrigue, corruption, cronyism, the use of drugs and by a disregard for the environment, best (or perhaps worst) seen in Albertville, hosts of the Winter Games 1992. The organisation has become a huge money-spinner and many question whether the Games have become overblown, due to the investment needed to stage the spectacle, and out of touch, because sports funding at a national level is often focused on the Olympic sports. Further, within those Olympic sports, it is the athletes who have medal chances (frequently heroes or heroines) that are given the lion's share: a good example of this is cycle racing in the UK. The honour of taking part is secondary [8] to winning, where the rewards for individual athletes who do reach the pinnacle of their sport can be enormous[9].

Golf also has a venerable history, starting at St Andrews in 1413. Centuries on, the popular image of the game is one of elitism and expense or the province of business chums, who cannot wait to stumble into the 19th hole (the bar) to put the miseries of the sometimes exasperating game behind them. Equipment is an issue, and not just after a bad round: some clubs, depending on their weight and face design, can give you a huge advantage. Length, in golf, matters. Golf courses take up lots of space and their environmental impact - not only in developing countries - in terms of water consumption and fertiliser use, is a major concern.

Cricket is a relative newcomer, a game that was first recognised in 1700 with its first code drawn up in 1744. Cricket has given much to the English language, the most enduring phrase being "not cricket" meaning not fair play, but more recently "sledging," or verbal abuse (or banter - depending on your viewpoint) between bowler and batsman has become a more ready part of the vocabulary[10]. Surprisingly, cricket is one of the easiest games to fix, as shown in the case of Hansie Cronje (1969 - 2002), the former South African captain, whose prodigious talent was seriously shadowed by match fixing for what, in the end, was a pittance - $10,000 was the bribe oft-mentioned.

Who should be responsible?

In the case of the sports-star mentioned in the introduction above, the directors of the company took direct action because their errant sportsman was impacting on their business. But what about the sports mentioned above, what about the organisations administering them who are sports organisations first and businesses second: who is responsible in their sport's arenas?

Olympics

The International Olympic Committee (IOC) has 22 Commissions who oversee all aspects of the Olympic Movement, including an Ethics Commission, set up in 1999. Transparency is radiated through the web site where the reach of the Olympics is long:

"The Olympic Movement is about more than sport. Surrounding each Olympic Games are several cultural programmes as well as educational programmes promoting the ideals of the Olympics. In addition, the Olympic Movement is continuously involved in humanitarian aid efforts, environmental efforts as well as the world-wide goal of elevating the status of women in sport."[11]

The Olympic values are self respect, respect, solidarity and fair play and they naturally focus on the athlete. Currently, one of the main focuses is on the use of drugs. IOC President Jacques Rogge stated that "Doping is the main threat to sport and its credibility."[12]

Golf

In golf, "The Royal and Ancient Golf Club of St Andrews (R&A) is the governing authority for the rules of the game in more than 100 affiliated nations. Apart from running tournaments, the R&A promotes the role of women and juniors, and is also "a leader in environmental and ecological research."[13] The English Golf Union[14] represents 730,000 amateur male golfers from 1,890 affiliated clubs and, with its sister union, the English Ladies Golf Association, also focuses on issues of race, with its Racial Equality Charter, on starter centres for girls and on safety and the environment. The Professional Golf Association of America (PGA)[15] is responsible for golf in the US and under their PGA Programs they have the PGA Foundation, which is a public philanthropic foundation, the PGA for the Disabled, they promote diversity and, with golf suppliers, are actively involved with the young. Values and manners matter too and the etiquette for playing has a list of do's and don'ts of its own, such as

Displays of frustration are one thing, but outbursts of temper are quite another. Yelling, screaming, throwing clubs or otherwise making a fool of yourself are unacceptable and, in some cases, dangerous to yourself and others[16]

The relationship between golf and business is much more upfront, as a number of articles in Business Week[17] explain, including one specifically on business etiquette and manners on the course. Equipment manufacturers are also literally kept on the ball over fairness and performance in articles that compare and contrast their offerings such as those in Golf World[18]

Cricket

Politics put cricket in the spotlight earlier this year with the fracas over whether England should play in Zimbabwe. Malcolm Gray, former President of the International Cricket Council, made his views clear in an article published in The Age. In it he stated that "it was not up to sporting teams to make political statements"[19] and that "for every time in any sport when politics are involved, not politics of sport but national politics, it's up to the governments to be decisive about it."[20] In this instance England (and New Zealand), were punished, Zimbabwe won the points eventually leading to England's elimination from the once every four years World Cup tournament. Another but deeper issue, that of corruption, has been on the cricketing agenda for some time:

Cricket has come a long way in tackling the evils of corruption. It has had to grow up quickly, but it can never relax and become complacent. If it does, the problem will inevitably return[21]

writes Lord Condon, Chair of the International Cricket Council Anti Corruption and Security Unit: it was the achievements of the anti-corruption unit that Malcolm Gray saw as "the highlight of his tenure."[22] as he believed

that cricket has been ill-equipped historically to deal with modern day challenges, with administrators unable to handle the amounts of money the sport can generate.

In the same article, he also referred to governance as "the major challenge for the sport in coming years." The Spirit of Cricket guidelines were added as a Preamble to the Code of Laws in 2000 in order to try and embody the values that were not explicit in the Laws:

Any action which is seen to abuse this spirit causes injury to the game itself. The major responsibility for ensuring the spirit of fair play rests with the captains[23]

Does CSR have a role in sport?

As we have seen from the very quick overview of some issues facing these major organisations, they have all taken steps to resolve those issues central to their sports in a businesslike manner. To recap CSR is:

the integration of business operations and values whereby the interests of all stakeholders, including customers, employees, investors, the community, and the environment are reflected in the company's policies and actions"[24] [my highlighting]

All stakeholders in sports, especially the organisations and businesses who owe their existence to sport could, and should, integrate CSR into their day to day activities and use it for their long term strategy.

What needs to be done?

CSR measures could include the following where the language of sport can be transposed to business, just as it is in many general management seminars:

· Set clear rules of the game for fair play;

· Ensure the core values are permeated both throughout the organisation and transmitted beyond the organisation's four walls;

· Foster trust in the outcomes: spectators, for example, want to see sportsmanship and fairness, not rigged set pieces;

· Be transparent in decision making, in disciplinary actions and in accounting procedures;

· Formalise open and professional pathways for whistleblowers;

· Focus on community benefit e.g. for clubs, it is from here that some of their future players will come;

· Show a better quality of life through underlining the benefits of health and fitness;

· Use sustainability as a basis for development of the sports' engagement, including ecological/environmental activity;

· Have clear equipment guidelines, whether cutting edge or controlled;

· Employ the best people for the job based on skills and qualifications;

· Follow diversity and equality in matters of gender, race, disability and age;

· Promote proper heroes/heroines, one of the groups of stakeholders in sports, as role models.

Sporting heroes and heroines are naturally a focus and whether on or off their chosen area of play, reflect the background in which they were nurtured and grew up and the society in which they trained. CSR gives the tools to grapple with the issues confronted by, and with, gifted players as well as all other stakeholders involved in sport. Just as business has a duty to the society in which it operates, sport, too, has a duty that is not only economic, or social and educational but one that can be truly inspirational. Only then we can really admire the heroes and heroines we deserve. On this point, a sportsman has the last words: IOC President Jacques Rogge:

Sport is not so much a power on its own, more a movement, which has a pivotal role to play in improving the values of the society we live in[25]

[Contributed by: Ivor Hopkins, Director, MHC International Ltd, Visiting Fellow to the Middlesex University Business School & consultant to Boards & More GmbH on Olympic Windsurfing]

 


Footnotes to Article

[1] Identity revealed see Surf magazine, "Radical Attitude or Simply Bananas?" (5/95, p. 26)

[2] Mark H McCormack, What They Don't Teach You at Harvard Business School (Fontana, 1986) p. 19

[3] For an overview of what stakeholders are see Michael Hopkins, The Planetary Bargain (Macmillan 1999 & Earthscan 2003) pp 38 ff

[4] See www.mhcinternational.com/measurement.htm for MHCi generic model of CSR

[5] Surf magazine, ibid, "Radical Attitude or Simply Bananas?" (5/95, p. 26)

[6] Fisher and Lovell, Business Ethics and Values, (Prentice Hall, 2003), p.15

[7] ibid, p.30

[8] This is not to decry the passion, focus, perseverance and athleticism shown by campaigning Olympians. Olympic windsurfing has been likened to playing chess whilst doing one handed press ups on a trampoline. And somebody occasionally sprays or douses you with salt water.

[9] Lee Lai Shan (Woman's Mistral Windsurfing Gold Medal, Atlanta 1996) was the first, and last, athlete in Hong Kong to win a Gold Medal. She became a millionairess overnight and also has a statue there in her honour

[10] news item 15.07.03: John Buchanan, Australian coach, warns team. www.bbc.co.uk/sport1/hi/3066811

[11] www.olympics.org/uk/organisation/commission/index_uk

[12] Olympic Review Apr/June 03, www.olympics.org/uk/news

[13] www.randa.org

[14] www.englishgolfunion.org

[15] www.pga.org

[16] www.pga.com/play/golf-etiquette.cfm

[17] www.businessweek.com/magazine/content/02_06

[18] wwwgolfworld.com/newsandtour

[19]www.theage.com.au/cgi-bin/common/popupPrintArticle.pl?path=/articles/2003

[20] ibid

[21] http://uk.cricinfo.com/link_to_database/NATIONAL/ICC/ANTI-CORRUPTION/

[22] www.theage.com.au/cgi-bin/common/popupPrintArticle.pl?path=/articles/2003

[23] http://uk.cricinfo.com/link_to_database/NATIONAL/ICC/ANTI-CORRUPTION

[24] Michael Hopkins, www.csrwire.com

[25] Introduction, Olympic Review April/June 03, www.olympic.org/uk/news/olympic_news/review_uk

 

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See Previous Monthly Features:

How can we define Corporate Social Responsibility? (Monthly Features: 6. - Is Corporate Social Responsibility the Same as Corporate Sustainability? - December 2000; 7. What, if any, is the relation between Corporate Governance and Corporate Social Responsibility?, January 2001. 26. Is CSR just a trendy fad?, December 2002; 27. CSR and Labour Issues, January 2003)

Who are the appropriate targets for CSR? (Monthly Feature: 8. Corporate Social Responsibility in Small and Medium Sized Businesses, February 2001)

Why should companies and organisations adopt CSR policies and programmes?

(Monthly Features: 1. Corporate manslaughter - June 2000; 2. Corporate Social Responsibility - The Big Picture - July 2000; 3. Will social responsibility burn up your bottom line? - August 2000); 4. Singapore: Corporate, Social and Responsible but no Corporate Social Responsibility - Oct 2000 9. Economics of Corporate Social Responsibility - March 2001; 11. Alternative View of CSR: A Dialogue with the Financial Times - May 2001; 15. CSR Investment - the next 'dot.com' boom?, - November 2001; 16. New Directions for CSR: Can CSR enhance a companies' intellectual capital? December 2001; 17. CSR in Recessionary Times - January 2002; 14. CSR, poverty and terror - October 2001)19. CSR: 5 Minutes with the CEOCSR: - March 2002; 23. CSR and Global Business Principles or Standards: What a mess! September, 2002 - September 2002; 25. CSR: Is it worth it?- November 2002?; 29. Sex, CSR and the Future - April 2003)

How can CSR efforts be measured? (5. How to measure what is meant by CSR? - November 2000; 10. CSR measurement: A Study from Brazil, - April 200; 12. Problems with FTSE4good - June 2001; 13. Summary of First World Report on CSR - September 2000)

How does present or future legislation affect CSR efforts? (20 - The social responsibility of Nation States - June 2002; 22. CSR and Legislation: Legislate of Not?CSR and Legislation - July 2002; 24. Socially Responsible Downsizing - October 2002;

CSR and Sports (21. CSR and Sport: The 2002 World Soccer Cup and CSR - April 2002 )