Back in March, when the storm over Australia’s ball tampering broke, I wrote a blog that drew some parallels between rules-based sport and regulated industries like financial services, particularly in the context of SMCR.

I suggested that real accountability for what had happened went far beyond the individual players who were banned, identified five areas where the incident might reveal something about regulation, but said we should wait for the report to be published before trying to draw any definitive conclusions. That report has just appeared, so time to revisit the relevant areas:

“Tone from the top”: The report, by the independent “Ethics Centre”, is unequivocal that there was a large gap between Cricket Australia’s rhetoric of “fair play” and the reality of what became a “win without counting the costs” culture. 

It is common to argue that, in financial services, the messages from senior management are diluted as they filter down through the firm. This incident highlights a credible alternative, that vision and values statements can easily be overridden by what senior managers are seen to encourage on the ground. Leaders may see their actions in the context of those values but this may not be how it comes across.

Accountability: As I thought, this has gone much wider than the players. Shortly after my original blog, the coach resigned, and Cricket Australia’s CEO has also subsequently left, although for a different reason. The report is clear that the top of Cricket Australia, as a whole, should carry its share. 

In the context of SMCR, this suggests, rightly I think, that individual Senior Managers operate within a culture that is set collectively. Usually, therefore, serious breaches of SMCR will also signal a broader problem. Individual accountability should be real, but regulators understand from their own experience that leaders respond to culture at least as much as they shape it.  

Independence: This report, importantly commissioned from an independent source, clearly identifies various conflicts of interest that Cricket Australia didn’t recognise and/or didn’t manage effectively. 

The aim of “maximising shareholder value” may be an equivalent of “win without counting the costs”. Both regulators and firms can miss the perverse incentives this potentially creates in a regulatory environment with explicitly broader and longer-term targets, such as well-working markets, consumer protection and resilience.

Competition: Sport, especially at the elite end, is ultra-competitive and (implicitly) the report recognises Australia’s (over) reaction to losing the Ashes in 2010/11 as one of the origins of the ball tampering.

However, it also goes on to suggest that the value of Australian cricket, and the sport as a whole, is dependent on far more that “winning”. reading across, in the midst of all the positive noise – from firms and regulators - around innovation and “disruption”, there must be some risk of making too many assumptions about what customers really want. 

Playing to the ref: In the first blog, I described three tiers of regulation – self, rules-based, and public opinion. The report has some interesting sections on the nuances between these – e.g. whether to walk if caught behind, the role of the umpire, and how the public’s understanding of what is “fair” changes depending on the situation. Also relevant, I suspect – for both firms and regulators, and to the ecosystem that supports and advises the industry – is that it talks about Australian cricket operating in a bubble.

The obvious conclusion is the need to rely less on the regulator to decide on matters of conduct. Given the wider events of the last couple of years and the general reaction to the ten year anniversary of the crisis, escaping any remaining “bubble” should be a priority.