باشگاه های ورزشی و رسوائی ها – درس های حکومتی  Sporting clubs and scandals – Lessons in governance

Teaching note Educators have a unique opportunity to enhance student learning outcomes in connection with the current spate of corporate governance shortcomings and scandals in sporting clubs. Although several case studies have focused on the corporate governance failings of listed companies (Beattie, Fearnley, & Hines, 2011), it is also important for students to be exposed to corporate governance inadequacies in other contexts. Within the sporting scandal case study, we investigate whether drug use is directly related to the moral hazard issue. Have internal controls broken down leading to individuals or a small team of people running ambiguous programmes involving the use of performance enhancing drugs? This is generally a symptom of poor corporate governance where the three building blocks of corporate governance being leadership, planning, and organisational performance are not well established and linked. Therefore, unless effective steps are taken by clubs’ central committees to curtail moral hazard, there will be personnel within the hierarchy that have a financial gain or other incentive to engage in excessive risk-taking. Generally, this type of behaviour often leads to questionable practices. This case study is designed as a practical assignment where students have an opportunity to apply corporate governance principles to a real-life case. As the sporting scandals were widely covered by the media, students are expected to be enthusiastic and familiar with current events reported in the media. Shortcomings in corporate governance identified in the case study are expected to enhance students’ ability to critically evaluate and review case study-based situations and identify applicable accounting regulations and financial statement consequences. The case study involves two well-known Australian sporting clubs: the Essendon Football Club (EFC) and Cronulla Sharks Rugby League Club (CS), and the events surrounding their recent scandals relating to the use of performance enhancing drugs. In late 2013, both clubs were rocked by fines and suspensions of senior coaches. We have implemented this case study successfully in a third-year compulsory undergraduate accounting course over three semesters at a large, public Australian University. The case study highlighted stakeholder needs in sporting clubs and helped students understand governance principles and recommendations for such entities. The case is flexible enough to address the needs of courses in management, sport management, strategy and business. The objectives of the case include: understanding the meaning of corporate governance; understanding the principles of corporate governance applied to sporting clubs; and identifying corporate governance disclosures in financial reports for sporting clubs. In the following sections, we provide a brief history of the National Rugby League (NRL) and Australian Football League (AFL) structure and a discussion focusing on corporate governance in sporting clubs. These sections should provide students with sufficient knowledge to maximise their learning potential through a case-based approach.