GoodCorporation comments on the Kay Report
“The City needs a change of culture with the emphasis on principle and integrity, rather than more reviews of management practice, if we want to restore trust and avoid a repetition of the recent financial scandals:” say leading business ethics advisers GoodCorporation.
“Reviews are both costly and time consuming and much of what is wrong is already evident. While the Kay report is right to link executive pay to performance, there are also a number of key steps that need to be taken immediately. From our work assessing companies against the GoodCorporation Standard, we have identified the ten key principles that need to be established in the City regardless of any review.
GOODCORPORATION’s core business principles:
1. treat customers fairly. Organisations must create cultures where they are working to achieve long-term customer relationships and satisfaction
2. no rewards for failure. Organisations should establish remuneration structures that align pay with long term customer relationships and satisfaction
3. incentives need an ethical dimension. Organisations need to develop appraisals and measurement systems that include ethics as well as sales and trading targets
4. speak up is crucial. Organisations need to create cultures where everyone is encouraged to voice any concerns
5. miscreants must be named and shamed. Organisations need to make an example of people that don’t meet their ethical standards
Trading Conduct
1. trading activities require their own codes of conducts
2. individual traders should be discouraged and trading in a team encouraged
3. no trade should take place that cannot be explained in a simple sentence to a boss or colleague
4. pay should be linked to long term overall company performance, encouraging traders to contribute to the company’s goals overall
5. trading environments must have strong processes to avoid both personal and corporate conflicts of interest
Leo Martin of GoodCorporation says; “Regulation breeds a culture of avoidance, with businesses focussing on ways round the rules rather than the way their business is done. We need a change of culture that requires companies to be responsible for the integrity of their business conduct and demands that senior executives know exactly what is going on. From the scandals we have seen recently, it really is about how a company behaves when no one is watching. At the moment, the answer to that would seem to be pretty badly.”
Posted August 2012
Notes to Editors:
1. Leo Martin is available for interviews, briefings or written comment
2. GoodCorporation studied the publically available information on Bribery and Corruption of 30 leading international logistics companies
3. GoodCorporation is a leading adviser in the field of business ethics, specialising in the assessment of responsible business management and anti-corruption practices.
4. GoodCorporation works with multinationals, FTSE 100 companies and SMEs to help measure, manage and implement responsible business practices. Our clients include 12 FTSE 100 and 6 CAC40 organisations including GDF-SUEZ, Total SA, Centrica, BG plc, BBC Worldwide, Shire plc, BAE Systems, FTSE, Telefónica and Xstrata.
Media Enquiries:
Sally McGeachie 020 8877 5300 or sally.mcgeachie@goodcorporation.com