The National Football League is now facing nearly a hundred lawsuits involving thousands of former players related to head and other types of injuries. They say concussion data was ignored by the league and it had a duty to protect players.
This litigation could be a precedent for a similar lawsuit against the National Hockey League. Concussions and the associated neurological damage are a problem in Canada’s favourite sport, and we have credible medical evidence now that we didn’t have before.
But is NHL Commissioner Gary Bettman really listening? What about the board?
Sporting governance is shrouded in mystery. Transparency International, in “Corruption and sport: building integrity and preventing abuses,” had this to say:
“There is generally a low level of transparency in many sport associations when it comes to publicly sharing information and documentation. This is often linked to the disclosure practices of team owners—who are often individuals or companies…. Board members of international federations as well as members of working committees are often expected to vote unanimously, with dissenting votes not registered in the minutes. Such practices prevent any real accountability, both for the boards and for sport in general.”
When I assess boards, I scrutinize the governance practices of the organization and how decisions were made—or not made. Here are just some issues I see with the NHL’s governance:
- Every board has to identify and oversee risk. I would want to know the reporting and assurance protocols the NHL board used and/or rejected for incorporating medical evidence for concussions in its oversight of management, rule-setting and strategy for the league.
- Gary Bettman has been NHL commissioner (basically the CEO) since 1993. A tenure of almost 20 years for any CEO is highly anomalous. I would want to know the NHL board’s plan for CEO succession, and whether it meets in closed session to discuss succession. I would also want to see Bettman’s position description, which is common now for CEOs.
- Bettman’s salary was, according to the National Post, US$7.5 million for the year ending June 30, 2010. It was $3.7 million in the 2004-05 season. Here, I would want to know how Bettman’s salary and incentive structure is set by the board, what the performance metrics are (e.g., expansion, relocation, revenue targets, growth rates, television and radio metrics, etc.), and whether the metrics and compensation are risk-adjusted, including for health and safety. I would, in short, examine how Bettman’s compensation drives his behavior.
- Every board has to have a reporting and accountability structure independent of executive management. Here I would want to know why the board meets only twice a year (see “NHL’s secret constitution revealed”), what independent directors existed, what the reporting and decision-making structures were, how rule-setting occurred, and the independent assurance and internal controls over player safety and league reputation.
- Lastly, I would want to know why there is minimal disclosure over governance on the NHL website. It is wholly inadequate. I have seen greater disclosure on small, not-for-profit boards.
As the lawyers wrote in their statement of claim suing the NFL:
“The NFL, like the sport of boxing, was aware of the health risks associated with repetitive blows producing sub-concussive and concussive results and the fact that some members of the NFL player population were at significant risk of developing long-term brain damage and cognitive decline as a result,” the complaint charges.
“Despite its knowledge and controlling role in governing player conduct on and off the field, the NFL turned a blind eye to the risk and failed to warn and/or impose safety regulations governing this well-recognized health and safety problem.”
We will see how this lawsuit plays out, but the lesson is that players grow up and knowledge evolves. So too must governance practices and the game itself.