Good governance and corporate responsibility through scrutiny

Posted on 11/05/2021 by Kate Grigg.

Over the past year, organisations across all sectors have experienced new complexities in shifting to a different operating environment and unparalleled challenges that have inevitably tested organisational culture and governance.

In this current context, many organisations in the private and not-for-profit sectors are reflecting on how to implement resilient governance practices that help achieve their environmental, social and business goals.

Making commitments to standards and setting out how an organisation intends to be responsible and fair is now an expected norm. But the realisation of these commitments depends on good governance, corporate responsibility and trust.

We at the Centre for Governance and Scrutiny (CfGS) believe now is a good time to assess how governance processes need to be strengthened and improved to build greater resilience and ensure that decision-making is efficient, effective and gives assurance to all stakeholders.

What happens when plans to improve, for good reason, fall short? Is oversight and validation of them sufficient? How are those most affected by commitments involved? And how assured are we that they are being honestly achieved? These are serious challenges that reach the core of social responsibility and business ethics.

We passionately believe in the role of good governance in enabling organisations to achieve their purpose, identify and mitigate risk and fully involve stakeholders. Some of our recent work has focused on designing governance arrangements that ensure transparency and accountability through scrutiny, supporting organisations to own their commitments and communicate their progress.

We have established and assisted independent scrutiny boards across different sectors to challenge, support, provide oversight and make recommendations – driving organisations to be more ambitious and responsive to their employees, customers and communities.

For ENGIE we designed a Scrutiny Board, to challenge the business on upholding their Responsible Business Charter.

Nicola Lovett, CEO ENGIE UK & Ireland said:

“The Charter and the scrutiny of our development against the commitments is driving significant progress, improving how we operate as an employer, contractor, partner and leader within our sector.
There is however much more to be done to meet our own high targets and we will continually evolve the way we work to better meet the changing needs of our stakeholders. As a result, I am confident we will continue to set new standards for responsible business for the industry to follow.”

You can read the second public report from the Scrutiny Board on the delivery of ENGIE’s Responsible Business Charter here.

We have managed and overseen the process of creating the Responsible Business Board for Storengy, aligning it with their Business Charter. We provide ongoing support to the Board in focusing on business ethics, social responsibility, and social value by forming recommendations to improve the business and any impacts it may have on society. Their progress will be communicated through a publicly disclosed independent annual report.

Christine Gaskell CBE, Chair of the Responsible Business Board said:

“This is a fantastic innovation that seeks to hold business publicly to account for the crucial aspects of its relationship with its community, employees, environment and ethical business practices in an open and transparent setting. We plan to make this an exemplar of ethical business and public accountability.”

We have also worked with Mears in developing an independently chaired panel of customer representatives, to hold Mears to account as they seek to raise service standards for all customers.

Alan Long, Mears Group Chief Executive said:

“When the Centre for Governance and Scrutiny proposed a radical new way of scrutinising Mears’ work I have to say I was a little nervous.
An independent chair who used to be responsible for housing at the Government Department would understand the sector and how it works. A strong panel of Mears residents selected by the CfGS and paid for their time and involvement would create a potential panel of critics. And with the right to directly hold our PLC Board to account and to issue a public report without our involvement could be a very risky strategy to prove that resident-led scrutiny works. 
However, I’m delighted to report our new approach has worked extremely well and I am proud of our board members – and grateful to them for coming up with a report which rightly highlights what Mears does well, where Mears needs to do more and welcomes our hard work over the pandemic.”

You can read the first public report from Mears Scrutiny Board here.

We are proud to help organisations demonstrate their social value and corporate responsibility through scrutiny. Using the frameworks and techniques of scrutiny supports strategy development, improves decision-making and provides objective critical-friend challenge of performance and delivery.

If you would like to find out how CfGS can support your organisation to embed good governance and improve outcomes please contact ian.parry@cfgs.org.uk

About the Author: Kate Grigg

Kate works across the CfGS research programme supporting projects in local government and the corporate sector, and facilitating the combined authorities goverance network.