Human capital as culture
Helping companies to effectively manage integrity risks around human capital is one of four areas of focus for The Red Flag Group. It is sometimes said that a company is only as good as its employees, and even that it is only as ethical as its senior management. When an employee engages in conduct that is so antithetical to the company, swift and decisive action is needed. I thought of all of the above when reading the sad story of the now former manager of the English national football team Sam Allardyce, who recently lost what he termed his “dream job”.
As reported by Rory Smith in The New York Times, in a piece entitled ‘England manager undone by a film’, Allardyce was filmed in an undercover sting operation instituted by United Kingdom newspaper The Telegraph. According to The New York Times, he provided an ‘explanation of how to circumvent rules on third party ownership, a model in which companies or individuals own some or all of the economic rights of players, which was banned by the Premier League in 2008 and by FIFA in 2014. In the video, Allardyce explained that he knew of a group that had been “doing it for years” before outlining how potential investors would seek to make a return’.
The organisation that heads English football, the Football Association (FA), acted swiftly in sacking Allardyce, even though he had only had the position since June and indeed was undefeated (1-0) in international play. Unfortunately, as the article noted, ‘the FA will have to face an uncomfortable truth. Three of the last seven managers the FA appointed left the job for nonsporting reasons: Glenn Hoddle, who made deeply unpleasant comments about the disabled; Fabio Capello, who left amid a controversy over John Terry; and now Allardyce. Another, Sven-Goran Eriksson, had a reign mired in scandal’.
The article then dryly noted, ‘There is a pattern here’. Admittedly, managing the English national team will always draw intense scrutiny. However, it is more than simply the bright lights that caused Allardyce to be sacked. Such a high profile position requires an organisation to look closely into not only the background of a candidate but also whether that candidate’s values are aligned with those of the organisation. The FA prided itself on standing above the world’s soccer scandals. As Smith noted in his piece, ‘For the FA, claiming to be the world’s policeman while turning a blind eye to apparent offences at home would have been the rankest hypocrisy’.
Investing in human capital requires a full range of commitments, including the commitment to find and recruit employees who model the values of the organisation.