Governance controversies and financial mismanagement in motorsport

Controversies in motorsport are often linked to failures of governance, including lack of internal controls and conflicts of interest. This chapter looks at motorsport’s unique governance structure within the sport industry, and how this has contributed to issues and controversies motorsport has faced. The importance of sport governance, particularly that of accountability, is reviewed within the context of the governance structure of motorsport’s main international governing body, Federation Internationale de l’Automobile (FIA). The governing body’s non-standard aims and broad reach results in a larger than normal purview than similar governing bodies, creating a less focused remit with a greater need for compliance and monitoring. The unusual power afforded to Formula One within the governance of motorsport is also discussed. Specific concerns around conflicts of interest are covered at governing body, Formula One, and individual team levels. The link between governance and financial issues then leads to a discussion of income sources, their control, and potential future pitfalls. The chapter then discusses reforms that have taken place to prevent future controversies, including clear policies, improved accountability, stronger enforcement, and increased transparency, alongside areas for improvement. There is still a way to go to ensure corporate levels of good governance in the business of motorsport.