first report by igc to fifa exco[2]

8/2/2019 First Report by Igc to Fifa Exco[2]

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IndependentGovernanceCommittee Basel,March20,2012

C/o Basel Institute on Governance

Steinenring 60CH - 4051 Basel

FIFAGOVERNANCEREFORMPROJECT

FIRSTREPORTBYTHEINDEPENDENTGOVERNANCECOMMITTEETO

THEEXECUTIVECOMMITTEEOFFIFA


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TABLEOF

CONTENTS

ExecutiveSummary.................................................... ............................................................. ..................................................31 Introduction-FIFAsGovernanceReformProjectandtheRoleoftheIndependentGovernance

Committee.......................................................... ............................................................. ..................................................42 FIFAsManagementofAllegedMisconduct............................................................................................................6

2.1 Methodology.......................................................................................................................................................6 2.2 Findings.................................................................................................................................................................72.3 Recommendations............................................................................................................................................7

3 FIFAsGovernanceReformProposals.......................................................................................................................83.1 Methodology.......................................................................................................................................................8 3.2 Findings.................................................................................................................................................................93.3 Recommendations............................................................................................................................................9

3.3.1 DemocraticReforms...................................................... ............................................................. .........93.3.2 ComplianceProgram..................................................... ............................................................. ......113.3.3 FinancialControls..............................................................................................................................113.3.4 Enforcement........................................................................................................................................12

4 NextSteps...........................................................................................................................................................................13


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EXECUTIVESUMMARY

TheReformProcess

In2011,FIFAdecidedtosubjectitsGovernanceStructuretoanextensivereformprocess.Ithas

establishedfourTaskForces,chairedandstaffedbykeyexponentsfromwithinFIFA.Inorderto

supervisetheprocessandtomakerecommendationstotheExecutiveCommitteeandtoCongress,

FIFAhasaskedProf.PiethoftheUniversityofBasel,Switzerland,toputtogetheranIndependent

GovernanceCommittee(IGC).TheIGCconsistsof13Memberswhoareeitherexpertsfromthe

legal,thecomplianceandtheinvestigationprofessions[6],orrepresentativesofvarious

stakeholdergroupsofthefootballworld(MemberAssociations,Leagues,Clubs,Players,specialized

MediaandSponsors[7]).Inafirstcycle,theTaskForceshavedraftedarevisionoftheStatutesfor

Congress2012aswellasseveralpolicydocumentsderivedfromtheStatutes,whichareduetobe

adoptedduring2012inordertoallowthereformtobefullyimplemented.

TheIGChasassessedtheproposalscontainedinthosedraftdocumentsaswellas

recommendationscontainedinreportsbyTransparencyInternationalandProf.MarkPieth.Ithas

alsoreviewedhowFIFAhasbeendealingwithvarioustypesofallegedpastmisconduct.TheIGC

hasconstituteditself,hasgivenitselfrulesofprocedureandhasdefineditsownmandate.

GovernanceReform

Generally,theIGCissatisfiedthattheTaskForceshaveconductedathoroughanalysisofthe

GovernanceStructure.TheIGCrecommends,however,tofurtherstrengthentheGovernance

StructureofFIFAbyinsistingontransparency,accountability,professionalismandindependencein

keyareas:FirstandforemostitisfundamentalthatnomineesforseniorFIFApositionsarevetted

byanindependentNominationsCommittee,tobeputinplaceassoonaspossible,inorderto

ensurethatcandidatesforthenextelectionsfulfillthenecessarysubstantivecriteriaandethical

requirementsandthattheselectionprocessisfairandtransparent.

Detailedrecommendationsaremadeonhowtosecuretheindependenceandcompetenceofthe

ChairandtheDeputyChairoftheAuditCommittee.ItisrecommendedthattheremitoftheAudit

CommitteebeexpandedtoincludetheadditionalrolesofaComplianceCommitteeaswellasa

CompensationCommittee(newname:Audit&ComplianceCommittee).

IntheopinionoftheIGCitisfurthermorefundamentalthattheChairsoftheNomination

CommitteeandtheAudit&ComplianceCommitteehaveaseatintheExecutiveCommittee.

TheIGCismakingfurthersuggestionsrelatingtotheupgradeoftheComplianceProgram,including

theregulationofconflictsofinterest,atasklargelytobeaccomplishedduringtheyearof2012

basedonregulationsandguidelines.

Financialcontrolsareafurtherfundamentalareainneedofdetailedattention.Whereasthecentral

auditfunctionisalreadywelldeveloped,FIFAmustbeplacedinthepositiontointensifyits

financialcontrolsoverMemberAssociations.Furthermore,FIFAisinurgentneedofstreamliningitsproceduresonhostingofcompetitions,onmarketingdecisionsandondevelopmentprograms.A


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newDevelopmentCommitteeshouldseetoitthatdevelopmentfundingisawardedona

transparentandfairbasisandfollowsapredefinedstrategywithallproceduresfullydocumented.

FIFAsManagementofAllegedMisconduct

TheIGChasreceiveddocumentsandhasconductedahearingonthewaysFIFAhasbeendealing

withpastmisconduct.Clearly,theexistingproceduresareintheopinionoftheIGCandthe

relevantTaskForceinsufficienttomeetthechallengesofamajorglobalsportgoverningbody.

Thishasledtounsatisfactoryreactionstopersistentallegations.Inparticular,theIGChasidentified

alackofproactiveandsystematicinvestigationofallegations.Insomeinstances,allegationswere

insufficientlyinvestigatedandwheresanctionswereimposed,theyareattimesinsufficientand

clearlyunconvincing.

TheIGCrecommendsthatthemostimportantproposalsmadebytheTaskForceEthicsCommittee

beimplementedassoonaspossible:especiallytheseparationofaninvestigatoryandan

adjudicatorychamberaswellastherightoftheinvestigatorychambertosetproceduresinmotion

propriomotu,i.e.theindependentabilityoftheEthicsCommitteetoinitiateinvestigations.TheIGC

stronglyrecommendsthattheChairsandtheDeputyChairsofthejudicialbodiesbestaffedassoon

aspossiblebytrulyindependentpersonsofhighstandingandexpertise.Theywillapplythe

substantiverulesinforce.Theproceduresneedtobeadaptedasdescribedimmediatelyafter

Congress2012inordertobeoperationaltodealwithallallegationswithintheexistingjurisdiction

ofthejudicialbodies.Whereasthesubstantiveruleswillnotberetroactive,proceduresand

organizationalmeasureswillbeapplicabletopastbehavior.TheIGCwillreviewtheCodeofEthics

asdraftedbytheTaskForce.Thejudicialbodiesmustbegivenadequateresourcesbothinternally

and,ifnecessary,throughcontractingofoutsideexpertsinordertobeabletocarryouttheir

responsibilities.

1 INTRODUCTION-FIFASGOVERNANCEREFORMPROJECTANDTHEROLEOFTHEINDEPENDENTGOVERNANCE

COMMITTEE

FIFAhaschangedconsiderablyovertheyears.Ithasevolvedfromasmallorganization,primarily

regulatingthegameoffootball,toanimportanteconomicenterprise;itstournamentsattractthe

attentionofbillionsoffansandspectators.Countriesaroundtheworldareinterestedinhostingthe

WorldCup.FIFAschallengeistoadaptitsgovernancestructuretoitschangingsocialandeconomic

significance.Thecorrespondinginternaldiscussion,particularlyaddressedatthe2002Congressin

Seoul,startedsometimeago.Sincethen,onamanageriallevel,significantstepshavebeentakento

upgradeoperationalstructuresandprocessestowardthestandardsoflargecorporationsor

internationalorganizations.However,FIFAcontinuedtobepubliclycriticizedforitslackofgood

governanceandtransparency,reinforcedbyasequenceofallegationsandincidentsofmisconduct

byfootballofficials.Asaconsequenceofrecentallegationsaroundthehostingdecisionsforthe


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WorldCup2018and2022andthecampaignofapresidentialcandidate,FIFAsubmittedproposals

tothe2011Congressinrelationtogovernanceandtransparency.TheCongressapprovedthose

proposals,therebyinitiatingfurtherstepstowardsareformofitsgovernance.InAugust2011,

TransparencyInternationalpublishedahigh-levelreportwithrecommendationsonhowtobuild

integrityandtransparencyatFIFA1.AlsoinAugust,FIFAmandatedProf.MarkPiethtoanalyzethe

existinggovernancestructure,toexpressanopiniononitsstandardandtomakerecommendations

forimprovements.TheresultingreportwasdeliveredtoFIFAonSeptember19,2011andwas

subsequentlymadepublic2.InOctoberandDecember2011respectively,theFIFAExecutive

Committeeformallyratifiedagovernancereformproject.Attheheartofthisprojectwasthe

establishmentoffourinternalTaskForces,supervisedbyanexternal,independentbody(Annex1:

StructureofReformProcess&CompositionofTaskForces).TheTaskForceRevisionofStatutes,

chairedbyExecutiveCommitteeMemberDr.TheoZwanziger,wasappointedtoreviewtheFIFA

Statutes,withaviewtointegraterecommendationsontheimprovementofgovernance.Chairedby

EthicsCommitteeChairmanClaudioSulser,theTaskForceEthicsCommitteewasappointedto

reviewtheFIFACodeofEthicsandstrengthenthepowersandindependenceofthejudicialbodies.

TheTaskForceTransparency&Compliance,chairedbyNewZealandFAPresidentFrankvan

Hattum,wasmandatedtolookintothegeneralprocedureforconflictsofinterest,improving

internalcontrolmechanisms,increasingthetransparencyofFIFAdevelopmentprogramsandthe

commercializationofFIFAsrights,aswellasexploringconfidentialreportingmechanismsandthe

statusofthecompliancefunction.TheTaskForceFootball2014,chairedbyFranzBeckenbauer,

lookedatallaspectsofmodern-dayfootballwithaviewtoimprovethegameatalllevels.

Inaddition,FIFAcametotheconclusionthatitsgovernancereformprojectneededtobesupervisedbyanindependentgroupofgovernanceexpertsandstakeholderrepresentativesthe

IndependentGovernanceCommittee(IGC).InNovember2011,FIFAaskedProf.MarkPiethto

establishagroupofindependentgovernanceexpertsandstakeholderrepresentatives.Aftera

thoroughandintensivesearchandselectionprocess,includingduediligenceoncandidates,Prof.

Piethpresentedagroupof13personstoformoftheIGC;theExecutiveCommitteeofFIFA

acknowledgedinitsDecembermeetingthecompositionandindependentroleoftheIGC(Annex2:

CompositionofIGC).

TheIGChelditsfirstmeetingonJanuary1819,2012.Thefirsttaskwastodefinepurposeand

powersoftheCommitteeaswellastoestablishproceduralrulesandafinancingmechanism

guaranteeingtheoperationofthecommitteewhilemaintainingitsindependence.TheIGCdecided

thattheworkoftheTaskForceFootball2014shouldnotformpartofitsremit.Theoutcomewasa

Charter,statinginteralia-thepurposeandpowersoftheIGC.Followingitsfirstmeeting,theIGC

informedFIFAofitsCharterandFIFAacknowledgedthedocumentonJanuary27,2012.TheIGC

Charterwasmadepublicthereafter3.

1http://transparency.org/content/download/62590/10026882http://www.baselgovernance.org/fileadmin/FIFA/governing_fifa_mark_pieth.pdf3http://www.baselgovernance.org/gov/governance-in-sports/fifa/independent-governance-committee-charter/


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TheIGCheldasecondmeetingonFebruary2123,2012.Thismeetingwasdedicatedto

understandinghowFIFAhandledvarioustypesofallegedmisconductandtoreviewingthereform

proposalsbytheTaskForces.

2 FIFASMANAGEMENTOFALLEGEDMISCONDUCTThissectionsummarizesthereviewbytheIGCofFIFAsmanagementofvarioustypesofalleged

misconductandrelatedfindings.Specificrecommendationsregardingthestrengtheningofthe

correspondingpolicies,structuresandprocessesareincluded.

2.1 METHODOLOGY

TheIGCinvitedFIFAtoexplainhowallegationsrelatingtothemostprevalenttypesofallegations

werehandledinthepast.FIFArespondedtothisrequestbyproducingadocument,summarizing

thehandlingofthemostrecentincidentsarounda)theallegationsbyLordTriesman,b)theso-

calledQatarwhistleblower,c)allegationsregardingthebiddingprocedurefortheFIFAWorld

Cupsin2018and2022,d)misconductattheCaribbeanFootballUnion(CFU)meetinginTrinidad&

Tobagoande)theISLcase.Ineachcase,theexplanationsbyFIFAweresupportedbythedisclosure

ofextensivewritten,confidentialdocumentation,including-interalia-relevantinternaland

externalcorrespondence,reports(e.g.theFootballAssociationreportsonallegationsofmisconduct

inrelationtotheFootballAssociations2018WorldCupBid)anddecisionsbytheFIFAEthicsCommittee.TheIGCalsoreceivedacopyofthefullreportbytheFreehGroupInternationalEurope,

AG,relatingtotheCFUmeetingonMay1011,2011inTrinidad&Tobago.Althoughrequested,

FIFAdidnotdisclosetotheIGCacopyofthedismissalofcriminalproceedingsbytheprosecution

oftheCantonofZugintheISLcase.Astwoconcernedpartieshaveappealedagainstthepublication

ofthedocument,FIFAsassessmentledtotheconclusionthatitislegallynotinapositionto

disclosethedocumenttotheIGCforthetimebeing.TheCouncilofEuropeencounteredsimilar

difficultieswhentheyaskedtheprosecutionofficeandthecourtsofZugtodisclosetheISL

documents,towhichtheymadereferenceintheirreportofMarch20124.Theprosecutionoffice

andthecourtsofZugdidnotdisclosethedocument,partlyorentirely,totheCouncilofEuropeand

noinformationwassharedwiththeCouncilofEuropebythecourtsofZug,whichwasnotalreadyknowntotheIGC.TheIGCreaffirmsitsinsistenceonthespeedypublicationoftheISLdocument.

Inadditiontoreviewingthelisteddocuments,theIGCheldahearingonFebruary21,2011with

ClaudioSulser(ChairmanoftheFIFAEthicsCommittee),RobertTorres(MemberoftheEthics

Committee),MarcoVilliger(DirectorLegalAffairs)andChrisEaton(HeadofSecurityatthetimeof

thehearing).

ThepurposeofthedocumentreviewandtheinterviewswasforthemembersoftheIGCtogainan

understandingonhowandbywhomallegationswerehandledatallstages,i.e.fromthereceiptofa

4www.assembly.coe.int/Communication/070312_RochebloineReportE.pdf


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complainttothedecisiontoinitiateaninvestigationtotheexecutionoftheinvestigationandfinally

tothedecision-makingprocessandsanctioningpracticeoftheEthicsCommittee.

2.2 FINDINGS

Overall,theanswersbyFIFAregardingthehandlingofallegedmisconductwerenotfully

satisfactorytotheIGC.Basedonthediscussionofspecificexamples,FIFAhasintheopinionofthe

IGC-shownalackofpro-activeandsystematicfollow-uponallegations.Insomeinstances,

allegationswereinsufficientlyinvestigated.AparticularproblemintheIGCsviewistheapproach

toissues,expectingacomplainttobeproducedthroughtheproperchannel,lookingtothe

complainanttoproduceevidence(whichmaybedifficultwithouttheabilityofthecomplainantto

questionparticularindividuals)andnotitselffollowinguptheseissues.WhencasesweredecidedbytheEthicsCommitteeortheAppealCommittee,theimposedsanctionsweregenerallylowand

sometimesnotproportionateordissuasive.TheIGCisalsooftheopinionthatthejudicialbodiesof

FIFAshouldhaveaccesstothenecessaryresources,especiallyforconductinginvestigations.

Overall,theIGCcametotheconclusionthattheexistingstructureandprocessesoftheEthics

Committeearenotsufficienttoproperlymanageallegationsofmisconduct.

2.3 RECOMMENDATIONS

Thegoalistheestablishmentofindependentandprofessionallycompetentjudicialbodiesleadby

internationallyrenownedexpertsintheirfield.Toachievethisgoal,theinvestigativeroleofthe

EthicsCommitteeshouldbestrengthened,includingtheallocationofadequateresourcestoinitiate

andconductprofessionalinvestigationsindependently.ThenewCodeofEthicsmustmakeclear

thattheEthicsCommitteeisempoweredtoinvestigateandadjudicatepastissuesorbehavior.The

IGCdoesnotrecommendintroducinganextraordinaryjudicialbodyorprocedure.Withthenew

CodeofEthics,theTaskForceEthicsCommitteehasproposedasolidfoundationforviableand

appropriatejudicialbodies.Attheheartoftherevisionistheestablishmentofa2-chambersystem

intheEthicsCommittee:aninvestigatoryandanadjudicatorychamber.Thesecondpillarofthe

revisedCodeofEthicsisthecompetenceoftheinvestigatorychamberoftheEthicsCommitteeto

initiateinvestigationspropriomotu,i.e.theabilitytoinitiateinvestigationsindependently.In

additiontobeingregulatedindetailintheCodeofEthics,theseimportantstructuraland

proceduralprinciplesshouldbelaiddownintheStatutesofFIFA.

InordertoimprovetheabilityofFIFAtohandleallegationsatallstagesoftheprocedure,theIGC

makesthefollowingspecificrecommendations,whichshouldbeimplementedassoonaspossible:

ThenewCodeofEthicsshouldbeputintoforcebytheExecutiveCommitteefollowing

Congress2012,afterdetailedreviewbytheIGC.Whereasthesubstantiveruleswillnotbe

retroactive,proceduresandorganizationalmeasureswillbeapplicabletopastbehavior;

TheChairsandDeputyChairsoftheInvestigatoryChamberandtheAdjudicatoryChamber

shouldbeindependentinaccordancewiththeproposeddefinitiontobeincludedinthe


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FIFAStatutes;inadditiontheyshouldmeetthenecessaryprofessionalrequirements

applicabletoallmembersofthejudicialbodiesassetoutintheproposedCodeofEthics;

TheinitialcandidatesforthosepositionsshouldbeselectedandproposedbytheIGC;

ThecandidatesshouldbeelectedbythecompetentFIFAbodyandstarttheirfunctionsas

soonaspossible;

TheEthicsCommitteeshouldbegiventhecompetencesandresourcestodischargeits

purpose.Specificallytheinvestigatorychambershoulddrawupabudgetatitsown

discretioninordertoconductprofessionalinvestigationswithinternalorexternal

resources;

TheSecretariatoftheEthicsCommitteeshoulddirectlyreporttotheChairsoftheinvestigatorychamberandtheadjudicatorychamberrespectivelyandshouldbe

independentfrommanagement;

Inordertosystematicallymanagecomplaintsandallegationsofallkinds,aunified

confidentialreportingmechanismshouldbeestablished,whichiseasilyaccessibletothe

public.

3 FIFASGOVERNANCEREFORMPROPOSALS3.1 METHODOLOGY

TheFIFATaskForcesstartedtheirworkbasedontherecommendationscontainedinthereports

byProf.PiethandTransparencyInternational,aswellasproposalsbyFIFAsstatutoryauditor,

KPMG.TheTaskForces(TFStatutes,TFTransparency&Compliance,TFEthicsCommittee)held9

meetingsintheperiodfromNovember2011toFebruary2012.TheBaselInstituteonGovernance

undertookthetaskofanobserveronbehalfoftheIGC.TheIGCreceivedallpreparatorymaterial

forthemeetingsaswellastheminutes.ThosemeasuresguaranteedatransparentworkprocessandinformationflowtotheIGC.TheIGCmetwiththePresidentofFIFAonFebruary22,2012to

discussthegovernancereformproject.

TheworkproductbytheTaskForcesisasetofproposalsfortherevisionofvariousexisting

constitutionalandpolicydocuments(e.g.Statutes,CodeofEthics,OrganizationRegulations)aswell

asproposednewdocuments(e.g.FIFACodeofConduct,RegulationsGoverningCandidaturesfor

theOfficeofFIFAPresident).TheIGChassummarizedandprioritizedtheproposalscontainedin

thevariousdocumentsandgroupedthemalong4majorgovernancetopics:a)DemocraticReforms,

b)ComplianceProgram,c)FinancialControlsandd)Enforcement.IGCsassessmentsofthe

documentsleadtoadditionaloramendedrecommendations.ThekeyproposalsbytheIGChavebeendiscussedwiththeChairmenoftheTaskForcesandagreementhasbeenreachedtoalarge


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extentonthefinalrecommendations.AppendedisaredlinedversionoftherevisedStatutesas

proposedbytheTaskForces,includingtheadditions/amendmentsbytheIGC(Annex3:DraftFIFA

Statutes).

3.2 FINDINGS

TheTaskForceshavethoroughlyworkedthroughtheinitialrecommendationscontainedinthe

reportsbyProf.Pieth,TransparencyInternational,andproposalsbyKPMG.Theyhavesometimes

expandedthescopebeyondpureorganizationalgovernancetopicstoincludespecificFIFA-internal

issues,suchasthecompositionoftheIFABandtheallocationofExecutiveCommitteeseatstothe

Confederations.TheIGCisoftheopinionthatthoseadditionalproposalsbytheTaskForcesdonot

compromisetheorganizationalgovernancereform.However,theIGCdoesnotcommentonproposalsofaratherpoliticalorfootball-technicalnature.

ThemajoradditionsoramendmentsbytheIGCtotheproposalsoftheTaskForcesaimat

strengtheningindependence;i.e.theestablishmentofjudicialbodies(seeSection1)and

supervisorybodies(seeSubsections3.3.1.1,3.3.1.2,3.3.3and3.3.42)withindependentmembers.

OtherimportantIGCrecommendationsrelatetotransparencyofinformation,traceabilityof

decision-makingandimprovementoffinancialcontrols.

Giventhecomplexityofthetaskandinordertoefficientlystarttheimplementationofthe

governancereformproject,theIGCstronglyrecommendstofocusinafirstphaseonthemost

importantrecommendationsandtoincludeintheFIFAStatutestheunderlyingprinciplesandcompetences.AtthesametimeandsimilartotherecommendationscontainedinSection1,theIGC

stronglyadvisestoimplementsomeofthecornerstonesofFIFAsnewgovernanceimmediately,i.e.

bydecisionoftheCongress2012.

3.3 RECOMMENDATIONS

Groupedalong4majortopics,thissectionpresentsthoseIGCrecommendations,whicharedirectly

relevanttotheStatutesofFIFA.

3.3.1DEMOCRATICREFORMS3.3.1.1 Audit&ComplianceCommittee

AnAudit&ComplianceCommitteeshouldbeestablishedwiththetypicalsupervisoryroleofan

AuditCommittee,andtheadditionalresponsibilitiesforaComplianceProgramaswellas

Compensation&Benefits.Thisincludesthefollowingprimarysteps,whichshouldbeimplemented

assoonaspossible:

TheChairandtheDeputyChairoftheAudit&ComplianceCommitteeshouldbe

independentinaccordancewiththedefinitiontobeincludedintheFIFAStatutes;in

additiontheyshouldmeetthenecessaryprofessionalrequirementsapplicabletoall


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membersoftheAudit&ComplianceCommitteeassetoutintheproposedOrganization

Regulations;



soonaspossible;

TheAudit&ComplianceCommitteeshouldbegiventhecompetencesandresourcesto

dischargeitspurpose;itshoulddrawupabudgetanddecideonthesupportofexternal

adviceatitsowndiscretion.TheCommitteeshouldberesponsiblefortheselectionofthe

externalauditors(seesubsection3.3.3)andforexaminingtheannualauditreportand

recommendations;

IntheareaofCompliance,theStatutesshouldbeamendedbytheresponsibilityoftheAudit

&ComplianceCommitteetoestablishandmonitorabestpracticeComplianceProgram.The

HeadoftheComplianceFunction(ComplianceUnit)shouldhavedirectaccesstotheChair

oftheAudit&ComplianceCommittee.Inaddition,theAudit&ComplianceCommittee

shouldhaveaccesstocomplaintsandallegationsfiledundertheconfidentialreporting

mechanismandshouldreceiveregularupdates;

IntheareaofCompensation&Benefits,theAudit&ComplianceCommitteeshouldhavethe

followingmainresponsibilities:

DefinetheoverallCompensation&BenefitsstrategyofFIFA;

DecideontheCompensation&BenefitsofthePresident,theExecutiveCommittee

Members,theSecretaryGeneralandtheIndependentMembersofStanding

Committees;

Transparency:TheCompensation&Benefits(includingallelementssuchasregular

&variablecompensationcomponents,benefits,pensionfundcontributions,

severance/terminationregulationandpayments)oftheabovelistedpositions

shouldbeindividuallyandannuallyreportedtotheCongress;

Regulationsshouldbeadoptedcontainingthestrategyandcriteriafor

Compensation&Benefits;

3.3.1.2 ExecutiveCommittee

Inordertosupporttheirsupervisoryfunction,theChairsoftheAudit&ComplianceCommitteeand

theNominationCommitteeshouldparticipateinthemeetingsoftheExecutiveCommittee;they

shouldthereforehaveaseatintheExecutiveCommittee.


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3.3.1.3 TermsofOffice

SlightlydifferingfromthesuggestionsoftheTaskForces,theIGCproposestheintroductionofthe

followingtermsofoffice:

President: 2termsof4years

ExecutiveCommittee: 2termsof4years

Judicialbodies: 1termof6years

ChairmenofStandingCommittees: 1termof8years

Retroactiveeffect:Thecurrenttermsofaffectedofficialsshouldcontinue;uponexpiration

ofasecond4-yearterm,only1additional4-yeartermcanbeadded;

Inaddition,theStatutesshouldstatethestaggeredboardprincipleandshouldlaythe

foundationforanimpeachmentprocedurebytheNominationCommittee(tobefurther

regulatedonpolicylevel)incaseanofficialprovestobeunfitforofficeduringhis/herterm

ofoffice.

ContrarytotheTaskForces,theIGCisnotproposinganagelimit;theproposedtermsofoffice,the

impeachmentprocedureandtheintegritychecksshouldservethepurposeofensuringefficient

corporatebodies.

3.3.2COMPLIANCEPROGRAMTheStatutesshouldbeamendedbytheresponsibilityoftheAudit&ComplianceCommitteeto

establishandmonitorabestpracticeComplianceProgramandtooverseetheCompliancefunction.

During2012,therelatingpoliciesandproceduresneedtobereviewedbytheIGCbeforeenactment

bytheExecutiveCommittee.Thepoliciesneedtoaddressinteralia-thefollowingtopicsina

consistent(i.e.thesameruleforofficialsandemployees)anddetailedway:

Conflictsofinterest

Gifts&hospitality

Confidentialreportingmechanism

Responsibilitiesandresources

3.3.3FINANCIALCONTROLSThebiggestriskareasintermsoffinancialcontrolsareDevelopmentPrograms,decisionsrelating

tothehostingoftheFootballWorldCup,commercialdecisions(e.g.marketing&TVrights),theuse

offundsbyMemberAssociationsand,Compensation&Benefits.Thelatterareashouldinafirst

stepbeaddressedbytherecommendationsinsubsection3.3.1.1.Fortheotherareas,theIGC

recommendsthefollowinginitialmeasuresinordertoimprovetraceabilityandtransparencyof

decisions:

DevelopmentPrograms:InaccordancewiththeproposaloftheTaskForces,aDevelopment

CommitteeshouldbeestablishedtakingalldecisionsregardingDevelopmentProgramsbasedonaclearlydocumentedandcommunicatedstrategy.Allrequestsfordevelopment


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fundsandtherelatingdecisionsshouldbeproperlydocumented.Theuseoffundsshouldbe

tightlycontrolled(e.g.throughauditsbyFIFAandtherequirementforauditedfinalreports

byrecipientsoffunds)andpubliclydisclosed.TheFIFAStatutesshouldbeamended

accordingly.

HostingoftheFootballWorldCup:Withregardtothebiddingprocedureforthehostingof

theFootballWorldCup,Article79oftheFIFAStatutesshouldexplicitlystatetheprinciples

ofintegrity,fairnessandequity.Inanextstep,thebiddingprocedureshouldbeclearly

regulatedonpolicylevel,includingrulesrelatingtocampaignsofbidders.The

correspondingpoliciesandproceduresshouldbereviewedbytheIGCbeforeenactment.

Commercialcontracts(TVrights,Marketing,i.e.licensing&hospitality,Ticketingand

Sponsoring)shouldbeputouttotender.Thebiddingproceduresshouldbetransparentand

basedonobjectivecriteria.TheIGCshouldreviewtherelatingpoliciesandproceduresin

thenextphaseofthegovernancereformproject.

FinancialcontrolsoverFIFAMemberAssociations:TheTaskForceshavemadeanumberof

specificproposals,especiallyrelatingtoreportingandauditingofFIFAMember

Associations.InordertoensuretheapplicationofFIFAsvaluesandprinciplesbyits

Members,theproposalsbytheTaskForcesneedtobefurtherdiscussedandimplemented

onapolicylevel.TheIGCshouldreviewthosemeasuresbeforeenactmentoftherelevant

policiesandproceduresbytheExecutiveCommittee.

Inordertoemphasizeindependencefrommanagement,theAudit&ComplianceCommitteeshould

selectandproposethestatutoryauditorofFIFAforelectionbytheCongress.

3.3.4ENFORCEMENT3.3.4.1 EthicsCommittee

TherecommendationsrelatingtotheEthicsCommitteearecontainedinSection1ofthisreport.

3.3.4.2 NominationCommittee

InordertoensuretheintegrityofFIFAsofficialsandkeyemployeesinlinewithFIFAsvaluesand

principles,aNominationCommitteeshouldbeestablished.Thisincludesthefollowingprimary

steps,whichshouldbeimplementedassoonaspossible:

TheChairandtheDeputyChairoftheNominationCommitteeshouldbeindependentin

accordancewiththedefinitiontobeincludedintheFIFAStatutes;inadditiontheyshould

meetthenecessaryprofessionalrequirementsapplicabletoallmembersoftheNomination

CommitteeassetoutintheproposedOrganizationRegulations;



soonaspossible;

TheNominationCommitteeshouldbegiventhecompetencesandresourcestodischargeits

purpose;itshoulddrawupabudgetanddecideonthesupportofexternaladviceatitsown


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discretion.ItshallalsohaveaccesstointernalinvestigatoryresourcesoftheEthics

Committee;

TheNominationCommitteeshouldhaveaccesstocomplaintsandallegationsfiledunder

theconfidentialreportingmechanismandshouldreceiveregularupdatesoninformation

relevantfortheirremit;

TheremitoftheNominationCommitteeshouldincludethefollowing:

Search,selectionandproposalofindependentmembersofStandingCommittees

Checksrelatingtoprofessionalcriteriaonallofficialscoveredbysuchrequirements

IntegrityChecksonkeyofficialsandemployeesofFIFA

ThecornerstonesoftheIntegrityCheckshouldberegulatedintheFIFAStatutes:

Personalscope:Keyofficials,includingPresident,ExecutiveCommittee

Members,CommitteeMemberstobeelectedbyCongress,Finance

CommitteeMembers,Keyemployees

Temporalscope:Retroactiveforallcurrentpositionholders;upon

election/re-election

DetailedregulationofcontentandprocessoftheIntegrityCheckshouldbe

establishedbytheNominationCommitteeduring2012andacorrespondingpolicy

shouldbeadopted.TheregulationshouldbereviewedbytheIGCbeforeadoption;

Inordertoimprovetransparencyanddemocracy,allopenpositionscoveredbythe

NominationCommitteeprocedureshouldbemadepublicandapplicationscanbe

submittedtotheNominationCommittee.

4NEXTSTEPS

AftertheapprovaloftheIGCandtheTaskForcerecommendationsbytheExecutiveCommittee,the

correspondingamendmentstotheStatutesshouldbepresentedtotheCongress2012.Inaddition,

somerecommendationsrequireimmediateimplementationthroughdecisionsbytheExecutive

CommitteeandtheCongress2012respectively.

TherevisedStatutesandtheimmediateimplementationofsomeimportantcornerstonesofFIFAs

governance-e.g.thenewCodeofEthicsandindependentmembersinimportantsupervisory

bodiesandthejudicialbodies-willtriggerthenextphaseofthereformproject.Thenextphase

shouldfocusonthedetailedimplementationofthereformprojectonanoperationallevel,basedonthecorrespondingpoliciesandprocedures.TheTaskForceshavealreadystartedtoworkonsome


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ofthemajorpolicies.However,thisworkneedstobereviewedbytheIGCindetailbefore

enactmentbytheExecutiveCommittee.Implementationofpoliciesandproceduresshouldbe

phasedaccordingtoworkprogresswiththeaimforfulloperationaftertheCongress2013.

_______________________

Prof.Dr.MarkPieth

ChairmanIndependentGovernanceCommittee

Disclaimer

The purposeofthisReport isto provide the Executive Committee of FIFAwith an independent

assessmentofFIFAsgovernancereformprojectincludingspecificrecommendationsregardingthe

improvement of FIFAs governance. The information forming the basis for recommendationscontained in this Report has been obtained in good faith from FIFA representatives and from

interviews with its officials and employees. The information in this Report is, in the IGCs

professional judgment, an accuratepresentationandanalysisof the informationprovided tous.

However, the authors accept no responsibility for any information that has been withheld,

knowinglyorotherwise.


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Annex1:


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Annex2:

IndependentGovernanceCommittee(IGC)Members

MarkPiethChairman

Mark Pieth has served as Professor of Criminal Law and Criminology at the University of Basel, Switzerland since1993. Having completed his undergraduate degree and his PhD in criminal law and criminal procedure at thisuniversity, he spent an extensive period of time abroad, most notably at the Max Planck Institute for Criminal Lawand Criminology in Germany and the Cambridge Institute of Criminology in the United Kingdom. After practicingfor a time as a private barrister ('Advokat'), he returned to his alma mater to complete his post-doctoral('habilitation') thesis on sanctioning and other aspects of criminology. From 1989 to 1993, Mark Pieth was Head of

Section - Economic and Organised Crime at the Swiss Federal Office of Justice (Ministry of Justice and Police). Inthis role, he drafted legislation against money laundering, organized crime, drug abuse, corruption and theconfiscation of assets. As a government official and later as an independent consultant, he also acquired extensiveexperience in international fora, amongst other things, serving as Member of the Financial Action Task Force onMoney Laundering (FATF), Member of the Chemical Action Task Force on Precursor Chemicals and Chair of anintergovernmental expert group charged by the United Nations with determining the extent of the illicit traffic indrugs. From the mid-1990s to the present, Mark Pieth has held a range of functions at the international level. He haschaired the OECD Working Group on Bribery in International Business Transactions since 1990. In spring 2004, hewas appointed by the UN Secretary General to the Independent Inquiry Committee into the Iraq Oil-for-FoodProgram. In autumn 2008, Mark Pieth joined the Integrity Advisory Board of The World Bank Group (IAB),advising the President of Bank and the Audit Committee on integrity issues.

JosLuisAstiazarn

Jos Luis Astiazarn has served as Executive President of the Spanish Professional Football League since 2005. Heis also Executive President of the Foundation of Professional Football and Vice-President of the Royal SpanishFootball Federation. Prior to his current appointments, he was Executive President of the Real Sociedad de Futboland Vice President of the first division clubs of the Spanish Professional Futball League. Mr. Astiazarn was also apracticing lawyer in the lawfirm Astiazarn y Astiazarn Abogados, specializing in civil, commercial and sports lawand courts.

Lord(Peter)Goldsmith

Lord (Peter) Goldsmith QC, PC is Chair of European and Asian Litigation at Debevoise & Plimpton LLP. LordGoldsmith served as the UKs Attorney General from 2001-2007, prior to which he was in private practice as one ofthe leading barristers in London.He became Queens Counsel in 1987 and has judicial experience as a Crown Court Recorder and a Deputy HighCourt Judge. Public appointments he has held include: Chairman of the Bar Council of England and Wales, Co-Chairman of the International Bar Association Human Rights Institution, Board member of the American BarAssociation Rule of Law Initiative, Co-Chairman of the ICC Taskforce on Arbitrations Involving States andChairman of the UK Financial Reporting Review Panel. He has an active international litigation practice and is acurrent member of the British House of Lords serving on the House of Lords Select Committee on the Constitution.

LeonardoGrosso

Leonardo Grosso has been a FIFPro Board Member since 1994 and FIFPro President since 2010. He began hiscareer as a goalkeeper in Serie A with Genoa in 1963 before joining Serie B club Perugia in 1970. After four

seasons with Perugia he signed for SPAL Ferrara in 1974 before ending his career with Modena in Serie B in 1978.During his 15-year career he performed in over 400 league appearances in Italys two top divisions. Leonardo is a


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professional lawyer, an AIC (Italian Players Union) Board Member, the President of the AIC UNLUS SolidarityFund and a member of the Board of the Fondo Fine Carriera Giocatori ed Allenatori di Calcio (a Fund for Football

Players and Coaches who ended their career). He also serves as vice-commissioner of ENPALS (a social servicesinstitute for professional athletes).

SunilGulati

Sunil Gulati is the current president of the United States Soccer Federation (USSF) and a lecturer in Economics atColumbia University. He serves as a senior advisor to the Kraft Group. Elected in March 2006, Mr. Gulati has beenone of the most influential figures in the development of US soccer over the past 30 years. Mr. Gulati served asUSSF Vice-President for six years and played a key role in major USSF decisions for many years prior to hiselection as president.

CarlosHeller

Carlos Heller has 44 years of experience in Public Management in the Cooperative Movement in Argentina. Since2005, he has been serving as President of Credicoop Bank, a cooperative banking organization that chose Mr. Helleras its General Manager when it was founded in 1979. Mr. Heller was also the first Vice Chair of the Association ofPublic and Private Banks of the Republic of Argentina, the Vice President of the International Association ofCooperative Banks and was a member of the Executive Committee of the Confederation of Popular Banks. Mr.Heller was Vice-President of the Boca Juniors Football Team, Argentinas most famous and popular team. Mr.Heller is an elected member of the National Congress for the Autonomous City of Buenos Aires with a mandateuntil December 2013.

MichaelHershman

Michael Hershman is President and CEO of the Fairfax Group. He is an internationally recognized expert on mattersrelating to transparency, accountability, governance and security. The Fairfax Group has advised governments,corporations and international financial institutions on issues pertaining to the conduct of senior-level officialsand/or the entities with which they do business. In December 2006, Mr. Hershman was appointed IndependentCompliance Advisor to the Board of Directors of Siemens AG, a company with more than 400,000 employees. Mr.Hershman served as Senior Staff Investigator for the Senate Watergate Committee, the Chief Investigator for theFederal Election Commission, and as Chief Investigator for a joint Presidential and Congressional Commissionreviewing state and federal laws on wiretapping and electronic surveillance. Immediately before founding theFairfax Group, Mr. Hershman was Deputy Auditor General for the Foreign Assistance Programme of the U.S.Agency for International Development (USAID). Mr. Hershman is a Member of the Board of Directors and Chair ofthe Audit Committee for the Canter for International Private Enterprise. For the past ten years he has been a memberof, and Vice Chairman of the INTERPOL International Group of Experts on Corruption (IGEC), and for the past 12years, he has sat on the Board of the International Anti-Corruption Conference Committee (IACC). For the past

three years, Mr Hershman has been selected as one of the one hundred most influential people in business ethics bythe Ethisphere Institute. Mr. Hershman is founder of the International Anti-Corruption Academy an InternationalOrganization located in Austria and is Chairman of the Academy Senior Advisory Board.

GuillermoJorge

Guillermo Jorge is founder and managing partner of Guillermo Jorge & Asociados, a Buenos Aires based legal andconsulting firm specialized in preventing and enforcing anticorruption and anti-money laundering laws andregulation and asset recovery remedies. Mr. Jorge is also an active consultant for international organizations andLatin American governments. Mr. Jorge is serves as the Director of the on Program on Corruption Control at SanAndres University School of Law and was Drapper-Hills fellow at the Center for Democracy, Development and therule of Law at Stanford University (2009), Reagan-Fascell fellow at the National Endowment for Democracy

(2006), and fellow at the Stanford Center for Latin American Studies (2002). Recent publications includeInternational Standards against Money Laundering, in Bernd Klose (ed.), Asset Tracing & Recovery, The FraudNetWorld Compendium, 2nd Ed., Dr. Erich Schmidt-Verlag, Berlin, Germany, forthcoming, 2012; Polticas de control


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de lavado de dinero, in Tokatlin, Juan G. (ed.), Drogas y prohibicin: una vieja Guerra, un Nuevo debate, ElZorzal, Buenos Aires, 2010; Recuperacin de Activos de la Corrupcin, Editores del Puerto, Buenos Aires, 2008;

The Peruvian Efforts to Recover Proceeds from Montesinos Criminal Network of Corruption, in Pieth, M. (ed.),Recovering Stolen Assets, Peter Lang, Bern, 2008. Guillermo holds a law degree from Buenos Aires University(1995) and an LLM from Harvard Law School (2003).

Seung-TackKim

Seung-Tack Kim is the Senior Executive Vice President & COO of Hyundai Motor Company. He is the Head of theGlobal Business Division, in charge of all global business matters of one of the largest automotive companies in theworld. He first joined Hyundai Motor Company back in 1983, and is now nearing 30 years of experience in the heartof the automotive industry. He is well known for his expertise in global business planning and corporate planningboth in Hyundai Motor Company and Kia Motors. His reputation is recognized not only within the industry, but alsothroughout various areas of the business world.

JamesKlotz

James Klotz is a partner at Miller Thomson LLP, and Co-Chair of the Canadian firms International BusinessTransactions Group. Having led complex corporate and commercial transactions in more than 108 countries, he iswidely respected for his deep knowledge and practical experience in the international business arena, his area ofspecialty. International anti-corruption is a related practice area. Mr. Klotz is currently President and Chairman ofthe Board of Transparency International Canada Inc. He is also Chair of the Bar Issues Commission of theInternational Bar Association, and Vice Chair of the Anti-Corruption Committee of the American Bar AssociationsSection of International Law. He was previously Chair of the Canadian Bar Associations International Law Sectionand Chair of its Anti-Corruption Task Force. Mr. Klotz is an Adjunct Professor of International Law at OsgoodeHall Law School.

FranoisMorinire

Franois Morinire has been CEO of Groupe L'quipe - Groupe Amaury, the market leaders in sport informationsince September 2008 . Responsible for strategy, editorial content and financial results, Franois manages andoversees the development of the totality of the groups' printed media (L'quipe, L'quipe Mag, France Football,Vlo Magazine, Sport & Style, Journal du Golf, etc.) as well as its digital activities (internet, TV, mobile etc.).Before joining the Groupe L'quipe - Groupe Amaury, Mr. Morinire has been the Managing Director and later theChairman of the Executive Board of CBS Outdoor France.

LydiaNsekera

Lydia Nsekera is serving as president of the Fdration de Football du Burundi since 2004, and as a member of theInternational Olympic Committee since 2009. She holds a degree in economic and administrative sciences at theUniversity of Burundi. In addition to her roles at the Fdration de Football du Burundi and the IOC, she was amember of the NOC Women and Sport Commission (2001-2006); a member of the Organizing Committee of the5th African womens football championships (2006), a Member of the Womens Football and Futsal Commission ofthe African Football Federation (CAF) (2006-), among others. Ms. Nsekera is currently a member of theCommission d'Organisation Tournois Olympiques de football and the Commission de Football Fminin et de laCoupe du Monde Fminine de la FIFA. She is a Winner of the IOC Women and Sport Trophy (2009).


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AlexandraWrage

Alexandra Wrage is the president and founder of TRACE, an international non-profit membership associationworking with companies to raise their anti-bribery compliance standards. TRACE provides compliance tools andservices to its members, including more than 200 multinational companies and more than 3000 SMEs in over 130countries. Ms. Wrage is the author of Bribery and Extortion: Undermining Business, Governments and Security andthe host of the DVD Toxic Transactions: Bribery, Extortion and the High Price of Bad Business produced by NBC.She has written three compliance guidebooks and is a guest blogger on the Huffington Post. Ms. Wrage speaksfrequently on topics of international law, anti-corruption initiatives and the hidden costs of corruption and regularlywrites articles appearing in the business and legal media. She has served as Chair of the Anti-Corruption Committeeof the American Bar Associations (ABAs) International Section and Chair of the International Legal AffairsCommittee of the Association of Corporate Counsel and is a longstanding member of the Working Group for theUnited Nations Global Compact 10th Principle. Ms. Wrage, a Canadian, read law at Kings College, CambridgeUniversity.

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