Building corporate trust by building in scrutiny
Public Trust Boards – what they are and how they work
The issue of trust in our institutions and decision-makers is something we are struggling with as a society. Alongside the usual suspects of greedy corporates, politicians, journalists and lawyers, others, who have previously occupied a higher moral space, have found themselves on the public trust warning list.
But whether it’s a charity, school, hospital, housing company, private sector business, sports body, broadcaster, constabulary or council, at some point failure will pay a visit and condemnation will follow. The nature of today’s 24-hour immediate communications means that the reputation damage is quick to spread and difficult to manage, see TSB’s recent foray into this space.
But what has changed? Citizens and consumers appear now to care as much about how organisations operate, as much as what they produce or deliver. If this is not carried out in a fair, ethical and transparent way, or fails to match their promised standards or brand promises, they are quick to react. To respond, organisations must now demonstrate their trustworthiness in a more transparent and proactive way and this must involve being open to scrutiny and offering the tools to others to test them.
Many businesses engage and invest in a Corporate Social Responsibility programmes (CSR). These often vary between the well-meaning, such as spend a sum on of money on community projects or social value initiatives, to companies which have fully engaged. This will include alignment of business operations to support or minimise community and environmental impact together with open and transparent business ethics. Putting deeds into action good CSR programmes are measurable, with clear targets and key performance indicators.
But what is often missing is scrutiny. Who is looking over the shoulder and testing these bold claims and ambitious targets? How much can we trust these seemingly obvious good intentions? Is the organisation held to account for the actions it asserts it will take?
Complying with good governance standards, regulation and the independent accreditation that supports this is only part of the answer. Governance is not scrutiny and it’s rarely public. Whilst it is not practical to conduct all commercial affairs in the public domain, there is a justification when CSR and other corporate programmes have community or stakeholder interest they could, and arguably should, be exposed to wider public scrutiny. This case is further enhanced when the corporation is wholly or partly contracted by the public sector and therefore spending public money.
The Centre for Governance and Scrutiny believes it has a solution to fix this potential scrutiny deficit and are launching a new governance concept for the private sector: Public Trust Boards.
CfGS not only has a wealth of governance and scrutiny experience, it has been in the thick of virtually every council that has been through the trauma of failure; helping to make sense of where a lack of clear scrutiny and accountability could have contributed to a sequence of mistakes that led to crisis. And finding solutions to fix this.
It has used this experience to develop a model of scrutiny for private sector businesses or corporate organisations to include a level of truly independent, authoritative and transparent scrutiny to look at issues of stakeholder or public interest. Public Trust Boards (the name is a working title) work as a formal part of a company’s governance structure to consider and scrutinise a range of company performance measures. The scrutiny looks into business objectives and ambitions that have a public and stakeholder interest. Crucially the Board can be comprised of members of the public – rather than the great and good non-executive directors which may provide strategic oversight but rarely if ever do public scrutiny.
No-one at CfGS is in any doubt that asking already heavily regulated and audited businesses to accept another burden onto their governance structure is a simple matter. But we do believe that companies looking to add greater validity and transparency to their activities, companies which are innovative, and value driven will be seen as both leaders in ethical business practice and enjoy stronger relationships with their customers and the public they ultimately serve.
We are already working with a number of organisations to implement different versions of Public Trust Boards. If you are looking for public assurance and scrutiny solutions for your business then please get in touch and we’d be happy to talk you through how Public Trust Boards could work for you.