Building trust and transparency into business culture

As controversy over the Libor fixing rate continues, ethics and transparency are highlighted as priorities for company executives

In the latest round of controversy surrounding the banks, I was interested to read that Barclays chief Bob Diamond could be brought before Congress and that Washington politicians are considering asking the former Barclays chief executive to testify as the Libor-fixing controversy crosses to the US.  

While Barclays is the first high-profile settlement with regulators – in June, Barclays was fined £290m ($450m) by regulators in the UK and US over allegations that it attempted to manipulate Libor – more than a dozen other banks, including Citigroup, HSBC and JP Morgan Chase, are now being investigated for their roles in setting Libor rates.

Most of the commentators and influencers surrounding this latest banking debacle have been talking about the banking culture needing to change, and once again the general public’s trust in banks has plummeted. I would go one step further to say that as a result of the recessionary climate and many of these disappointing revelations, business culture in general is now changing or being forced to change. 

Executive responsibilities

Ethics, trust, transparency, accountability and responsibility all now factor heavily on executive shoulders. This year alone, there has been much in the media about shareholder revolts around executive pay, with many questions raised as to whether they deserve these incredible salaries and whether bonus payments are justifiable. 

Is the executive promise delivering what the business needs and what shareholders believed they were buying into at the outset? Why is it that executives are paid so much? What sets the executive apart from the rest?

I believe every employer has the right to expect the following behavioural characteristics to be displayed by the executive:

  • Application – devotion to the need and objectives of the company;
  • Integrity – ethical and proper conduct in all business matters;
  • Honesty – true and honest business reporting and business dealings;
  • Loyalty – to the company and colleagues;
  • Consistency – in behaviour and employee relations;
  • Respect – for the company and its leadership.

Cultural shift towards more senior roles for women

With many high-profile failures and the increasing pressure to change business attitudes and culture, I wonder whether we might start to see more women taking up senior positions. The fact that all of these instances have involved men begs the question whether shareholders will start to look further afield when selecting talent and demand for women to fill board positions will increase.

Women have been knocking on the doors to boardrooms for decades, albeit mainly in vain. Now however, there is a good chance that more will be allowed in – and not before time. The share of women in junior and middle management roles has been growing rapidly for some time, but at the very top, especially when looking at CIO and senior project management positions, numbers remain shockingly small.   

Studies have shown that companies with women in senior positions are more successful than those with few or none

Charlie Mayes, managing director, DAV Management

Recent statistics show that in large publicly listed companies in the US and Britain, only 16% of board members are female. In Europe, the share is miniscule. Only the Nordic countries have respectable numbers of women on boards (35%). 

The pressure is mounting to push up the numbers elsewhere. In Britain, a government-commissioned report on women on boards published in 2011 called for greater transparency in making senior appointments. There is also a growing demand for more detailed information on the proposition of women in various levels of an organisation and monitoring progress.

Why this sudden flurry of activity after years of glacial progress? In this recessionary climate, many governments have realised that their economies need all the talented people they can get, despite high unemployment. In the past few decades, women have been pouring into universities in vast numbers – in most countries, women make up a majority of new graduates. These highly qualified women are an underused resource. Study after study has shown that companies with women in senior positions are more successful than those with few or none.  Today, all-male boards look increasingly out of date. 

Selecting the right people for the job

Interestingly, at DAV, 50% of the board is female. This was not by design, but was more about recruiting the right people for the job. Around 40% of DAV’s project managers have also been women and, in general, I think the company has been pretty good at recognising the different skills and approaches that individuals – be that male or female – bring to the table. 

DAV often gets involved in helping its clients put in place recruitment strategies to help organisations bring on board the right calibre of people for project and programme management roles. This is all about attracting the appropriate talent for the job and having a good mix of skills, which means having a blend of both men and women and the key attributes that both groups deliver. 

Last year, DAV attended a networking forum where Kirstin Furber, HR director for BBC Worldwide, talked very passionately about the differences that men and women bring to the board. She believes that women have a different skillset to their male counterparts, with more of a focus on building robust, sustainable and collaborative businesses rather than short-term, individually inspired results that men tend to seek.

It might surprise readers to know that there are more female millionaires between the ages of 18 and 24 than there are men, and that there is a proven link between gender and profitability, demonstrating that women are very engaged with business.

According to Kirstin Furber, women tend to lead from the back and have a significant concern for ethical business, demanding strong customer loyalties. Furber also states that women have great emotional intelligence, allowing them to bring the best out in people. They also tend to have a longer-term focus, which enables them to build more sustainable business.

I believe it is people who make companies. Looking further afield into the talent pool to select a mix of aptitude and ability will help to build more successful businesses with all the right checks and balances in place to ensure that healthy profit margins are achieved in an ethical way and not at the expense of others.

Charlie Mayes (pictured) is managing director of DAV Management

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