The Illegitimate IOC?

Wednesday’s Op-Ed by Jules Boykoff in the New York Times criticises the IOC for its elitism and arrogance.  Sidestepping the conventional criticism of corruption, Boykoff attacks governance, the preponderance of royalty on the committee, and, essentially, its condescension.  It is in effect a commercial construct that denies accountability (such as the ethics committee who report to the IOC executive, populated no doubt by – as Sir Humphrey would refer to them – sound men) and retains, as he concludes, “the arrogance and aloofness” that make it very ordinary indeed.

Following on from yesterday’s post about the legitimacy of Non-State Actors (NSAs) or Multi-National Corporations (MNCs), it would appear to be a perfect specimen.  The Olympics is a brand, and a business.  It is an extraordinarily lucrative business for its members, and for the ecosystem of business partners around it.  The image of the Olympics, its brand, is extremely powerful, and one that other brands all over the world clamber to be associated with.  That image needs to be carefully managed, and while it is associated with the peak of human achievement, physical excellence, and all that spirit of Athens mullarkey, it is strong.  Mired in doping, corruption and the suppression of dissent, the brand value dissipates.  Perhaps the brand value is equivalent to its legitimacy?  It’s Soft Power?  The extent to which people admire the Olympics, and Olympians?  Brand is about image, appearance, and not necessarily substance; brands can be fabricated, constructed, built and maintained through paid association and creative energy.  Is the legitimacy of the state similarly devoid of substance?  Can a State’s legitimacy be equated to the value of a brand?  Can a State therefore have a value?  Can the legitimacy of the state – by extension – be monetized?  Because it certainly seems to me that the corollary – that unelected brands can dictate social policy – is true.  Pop stars find an audience at the UN; public health campaigns are funded by companies that create the health hazards in the firstplace, like companies selling alcohol, tobacco and sugar.

The value of the brand of a company is a little easier to calculate than that of a state, or of a non-profit NGO.  One seemingly reasonably random internet person suggested the following for caluclating brand value:

One way is to take brand value of the company as a whole, in terms of its market capitalization, and subtract from this the value its physical and other assets except the brands. The remainder is then considered to be equal to the brand value. Another approach to calculate the brand value is to calculate the present value of all the expected future profits of the company as its brand value. For this purpose profit is taken as the net profit after providing for the nominal interest on the net worth of the company.

Brand value at product level may be calculated by comparing the market prices of the branded product with comparable product without significant brand value, and then using this price difference to calculate additional profits earned due to brand image of the product. Calculating the present value of the stream of additional profits expected in future gives the brand value.

Wikipedia, perhaps only slightly more authoritative, suggests a series of consultant led methods (see Methodologies section) which seem difficult to measure empirically (differentiation and awareness for example are subjective things).  Nevertheless there are some methods for assessing the brand value of non-profits and, more generally, of measuring the value of brands that are not directly part of a commercial enterprise.

As a brief aside, Proctor and Gamble are running an ad campaign at the moment where they claim to be the “proud sponsor of mums”.  It’s a little creepy to say the least that a commercial brand like P&G would encroach on Motherhood itself and stake it as their construct.  Their language is careful, but is there no dominion free?  Are “Mums” now a brand, with equity that can be purloined by a canny and unscrupulous advertising creative?

So we spoke previously about the Foreign Policy Magazine failed state index, which measures the extent to which states are failing; inverted, it could potentially measure the extent to which states are succeeding.  The component metrics too point towards a legitimacy index.  Brands too have a value, and Interbrand quantfies and ranks them every year.   Methods behind that too could be combined with the Failed State Index to yield a non commercial brand value, or a legitimacy index.

But there are other factors.  For one thing, as we already discussed, there is external and internal legitimacy – the extent to which legitimacy is perceived outside the State or Entity, for the purposes of interacting with other States or with International Markets, versus the extent to which legitimacy is perceived by the citizens of a state, or the customers or even the employees or subjects of a brand, MNC or other NSA.  Also, there is the context within which legitimate authority is exercised – a state may have dominion over justice, but not over the family, or religion; an NGO like the Red Cross may have authority in recommending aid strategies, but not necessarily in recommending trade strategies; Coca Cola may have authority in recommending anti-obesity strategies, but not anti-sports-doping strategies.

There’s much work to be done – perhaps I’ll post a powerpoint next time, in order to organise these thoughts more effectively!

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