Corporate Governance in Soccer

Corporate Governance in Soccer
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Executive Summary
      Corporate governance involves the mechanism through which a corporate organisation or firm is directed and controlled. Some of the advantages of enhancing corporate governance include the promotion of democracy, linking the club to the community that forms the major stakeholder, establishing stability and confidence, improving relationships with the local businesses and empowering the fans and stakeholders. The principal disadvantages highlighted are in the form of decision making, finance and sustainability. Ineffectiveness in corporate governance is a product of lack of competence in management, low stakeholder commitment and inadequate resources among others. Some of the measures that can be applied in minimising the negative impacts of corporate governance include strengthening the internal governance mechanisms, empowering the shareholders, enhancing the disclosure requirements and enhancing the public enforcement.   The paper will focus on the analysis of the Corporate Governance in soccer, with a special emphasis on Europe.






Corporate Governance in Soccer
      The definition of corporate governance has been subject to numerous definitions due to the global diversity of the practices. For instance, Shleifer and Vishny (1997, p. 737) define corporate governance as the executive method through which the executive controls the financial resources in corporations to enable them acquire profits for their investments while Aoki (2000) avers that corporate governance represents the structure of the responsibilities of the stakeholders of an organisation. The prevalence of the cases of governance failure in professional soccer clubs has led to increased interest in the corporate governance of the professional soccer clubs. Farquhar, Machold and Ahmed (2005) blame these cases on the lack of adequate internal and external mechanisms for governing soccer. This...