To improve public procurement – use the Trust Test
Public procurement is too often solely made on price, and not enough on true value and to account for areas...
Tomorrow’s Company proposed such an oath in our report ‘Restoring Trust’ in June 2004. We called for an overarching ‘statement of principles’ to cover all aspects of the financial services industry, to which all parties could commit.
More recently, a group of the Class of 2009 Graduates of Harvard Business School have similarly initiated ‘the oath’ – a voluntary pledge for MBAs to “create value responsibly and ethically.”
The Lord Major of the City of London, no less, argues “we need to think about how to put ethics at the heart of the City, and how to ensure it is more than nice words and good intentions” (30th March 2010): the ground is shifting.
Stephen Green, Chairman of HSBC, is moreover quoted as saying: “It is as if, too often, people had given up asking whether something was the right thing to do, and focused only whether it was legal and complied with the rules”.
However, the statement that “bankers could be forced to pledge to behave ethically” underlines the difficulty of doing it in practice. Trust cannot be forced and such an initiative won’t work in isolation. It will also challenge the role of accountants and other professional bodies: auditing ethics and auditing finances is rather different!
We linked our proposal to the creation of a forum for self-regulation, at which leaders from all parts of the investment system would meet to address those issues key to the building of public trust – now more urgent than ever – linked to an industry-wide ‘seal of approval’ to support the statement of principles and provide a visible and marketable endorsement.
Values cannot be compelled; they have to be led and lived from within. Green again: “”No banking business can afford to do without ‘board-led’ senior-management supported ethical approach to behaviour.”
Regulation all too often forces attention on the regulator; not the customer or citizen and wider society. A subtler, more nuanced approach is needed which goes beyond either/or simplicities and the demonisation of institutions and the people who work for them.
There are many examples of effective ‘regulation’ rooted in self-regulation, led by business leaders responding to and working with leaders in civil society and government – from the ‘Equator Principles’ to endangered species, and standards for the use of natural resources such as timber.
What these have in common is the recognition that self interest requires a change in approach, creating new opportunities, because old ways of doing business are no longer fit for purpose, whilst reinforcing those who do act with integrity. To be sure outside pressures – above all, the voice of civil society – can require the change, but these cannot deliver the change required.
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