The below observations/ findings are all informed by a review of the publicly available records and does not purport to be a review of the governance or the effectiveness of the board of the FAI. We are using the facts and information to inform advice regarding the importance of strong governance and the need for preemptive independent reviews and oversight.
As the scandal of the FAI rumbles into it’s second month we are comforted with the news that the FAI have engaged a fourth independent review of it’s affairs. We will soon be able to delve into the reports of Mazars and Grant Thornton for insight into the organisation and read about the mismanagement and corporate governance failings that precipitated the fall of the empire.
Relative to the expected costs of the independent reviews will we really learn anything new about the organisation? It is apparent that the Board were found wanting for the most basic corporate governance standards: independence & objectivity (The former CEO serving as Director for 18 YEARS ), long association (5 of the remaining directors had served >13 years each), segregation of duties (The former CEO serving as Director for 18 YEARS), lack of oversight of operations or internal controls (As borne out by the admission of ignorance of the €100k loan issued to the organisation by the then CEO).
Auditors Deloitte reported the company for failing to keep proper accounting records, which is potentially a criminal offence.Form H4 filed by the Audit Firm on 12 April 2019.
As per www.governancecode.ie the Football Association of Ireland are on the compliance journey. It’s fair to assume now that they didn’t get terribly far on their journey. For a Type C organisation there are only 75 compliance obligations in the Governance Code.
If the Governance Code was not appropriate or transferable to the organisation then a specifically sport oriented good governance toolkit may have been of use to the organisation. In 2016 the “Better Board Stronger Sport” project and toolkit was released through Sport Ireland. The project was a European Commission funded project and had direct input from Just Sport Ireland’s Sarah O’Connor & Conn McCluskey. I have used the toolkit included in this publication on a monthly basis since it was published. It is practical, user friendly and provides some excellent guidance around governance in sport. When this publication was released Just Sport Ireland and the FAI had a common director in Sarah O’Shea.
On the FAI website there is reference to the directors membership of “7 Committees” despite there appearing to be 9 committees referred to in the same article. There is a lack of transparency in regard to the organisational structure. There is no reference to the existence of a Nominations Committee.
The Board has established an Audit Committee with responsibility for monitoring the effectiveness of the Association’s risk management and internal control systems. The audit committee comprises of members from the National CouncilTaken from the 31-December-2017 Audited Financial Statements.
There is no further reference to the composition of the Audit Committee, the work or reviews undertaken or any reports issued by the committee in the annual report , audited financial statements or the FAI website.
Perhaps it is the cynicism of an Auditor but I am confident that there are many more organisations that would not stand up to the scrutiny that the FAI have faced recently. The hope is that those organisations like many of the directors in the FAI will be acting in the interest of the organisations mission and objectives however, you as a Director, have a duty to protect the organisation and preserve and protect the services that you are providing to your stakeholders.
We urge you please don’t waste your money on governance reviews after the fact. Act now. Get an independent assessment of your corporate governance now and prepare a road map to ensure sustainable on-going good governance.