OCI fails on basic requirements, Deloitte report suggests

The picture that emerges from the Deloitte report into the Olympic Council of Ireland (OCI) is of an organisation that fails to adhere to many of the basic requirements of well-run bodies.

Demarcation lines between office holders appear to be neither understood nor observed; transparency is lacking and there is no oversight of auditing and remuneration functions.

Also, the capacity of members to call meetings is significantly less than in other similar bodies; there is limited attention to ethics and conflicts of interest; and no limit whatsoever to the length of time office holders can retain their position.

Pat Hickey has been president of the OCI for an extraordinary 28 years – and retains the position still, although maintaining he has stepped aside, temporarily he says, while on bail in Brazil. In four of seven national Olympic bodies elsewhere surveyed by Deloitte (the British, US, Australia, New Zealand, Singapore, Canada and South Africa corresponding Olympic organisations) such a lengthy tenure is not allowed.

Unambiguous

The report is unambiguous in its finding under the terms-of-office heading.

“There is strong evidence that organisations benefit from term limits: it prevents the dominance of one viewpoint or mode of thought, it is demonstrably fair to all, and it encourages a renewal and refreshment of governing body thinking and skills,” it says.

A compelling 96 per cent of OCI stakeholders surveyed said there should limits to the terms of office for members of the OCI executive committee. Deloitte recommends a limit of two four-year terms, with a third four-term permitted only in exceptional circumstances, which the report does not define.

Deloitte's findings are disclosed in a draft report, dated October 20th, which has been obtained by The Irish Times. Last night, the OCI discussed the final version in Howth, Co Dublin. It is not believed to be different in substance to the draft.

Deloitte is an international company of consultants who audit companies and organisations across a range of headings including governance, management and financial affairs.

The company’s Dublin office carried out a review of the OCI, at the council’s request, following the arrest of Hickey and others by police in Rio de Janeiro investigating ticket touting, theft, tax evasion and money laundering at the Olympic Games there.

Hickey denies the charges.

For their review, Deloitte examined the articles and governance arrangements under which the OCI operates. They also carried out an online survey of all OCI stakeholders, which was completed by 23 of the council’s constituent national sports federations, and then interviewed 14 of those stakeholders whom the consultants regarded as key to their endeavours.

Ladybird Guide

With phrases such as “it is important that there are clearly defined roles to ensure transparency and accountability in relation to decision making”, the report reads like a Ladybird Guide to good governance, such is the basic nature of many of the recommendations.

The deficiencies betrayed by the recommendations tell their own story. They include:

– The OCI’s memorandum and articles should be updated to define clearly the differing roles and responsibilities of the council and the executive; there should be no “double hatting” and a clear segregation of duties. Some stakeholders observed “the president has ‘too much power’,” the report notes.

– The chief executive should develop a strategic plan, the progress of which should be monitored regularly. Astonishingly for a body in receipt of public money, the report notes: “There is no strategic plan setting out the key objectives of the OCI and how it plans to achieve this strategy and objectives, which is the responsibility of the CEO and the executive committee.”

– The report says there should be a clear division of responsibilities between the chief executive and the management. Some 73 per cent of those stakeholders surveyed said there was a lack of clarity between the roles and responsibilities of the council and executive committee.

– The OCI should have two independent members “chosen specifically for their independence, skill, expertise and knowledge” and the facility whereby the executive committee can appoint “any person to be an honorary member for life or such a period as the executive committee sees fit” should be removed.

– The provision allowing outgoing officers of the council and members of the executive committee to be nominated for election to the executive committee should be removed.

– Provision should be made for the removal of executive committee members who are underperforming, as allowed in the Companies Act 2014.

– There should be audit, risk, remuneration, nomination and governance committees - “to provide oversight on financial reporting, internal controls and key risks” as well as “to support effective implementation of the recommendations of this report”.

– Meetings should be summoned under terms similar to those detailed in the Companies Act, the report noting stiffly that OCI limits to the calling of meetings, and what can be raised at them, is “inflexible and non-conducive to managing urgent matters”.

– All papers relating to meetings of the executive committee should be distributed at least five working days in advance. An annual calendar should set out key meeting dates 12 months in advance.

– Provisions should be introduced “explaining how conflicts of interests are managed” in relating to voting.

– The report recommends a review of internal communications with a view to putting information on the OCI website and circulating minutes and key decisions taken. It notes that “approximately 73 per cent of survey respondents disagreed that there is transparency” within the OCI.

In an overview to the report, the authors of the Deloitte report note that “ultimately, effective governance depends of people and fundamentally the right behaviours and culture, an assessment of which are outside the scope of this review”.