Publication Governing Values: a guide for boards of financial companies

Executive Summary

Integrating Values into the Governance Process

In 2012 the former Lord Mayor, Alderman Sir Michael Bear, recognising the importance of the City’s reputation for trustworthiness as a critical part of its competitive advantage in the increasingly global world of finance, launched the “Restoring Trust in the City” initiative to identify, encourage and embed values and behaviours within City firms and their employees which reflect the highest of ethical standards.

This initiative culminated in the creation of the City Values Forum (CVF), a convening body and clearing house for ideas which will promote the exchange of views and information. The CVF has mandated a number of workstreams aimed at enhancing the City’s reputation for integrity and high ethical standards ranging from the City obligation, and re-examining the role of ‘my word is my bond’, to the development of a CityHR Gold Standard.

In conjunction with its Good Governance Forum Tomorrow’s Company was asked to undertake the CVF’s Governing Values workstream. This workstream focused on the role of the board in setting corporate values, which are aligned to the business’s long-term strategy, and in ensuring that management promotes and embeds such values consistently all the way through the business to the “coalface”.

Governing values

“Purpose and values require leadership from the top since they involve both strategy and example. They are critical to the success and sustainability of any major enterprise today – they must be driven by the board, led by the chairman and embedded in the thinking and process of the business.”

Sir Win Bischoff, Chairman, Lloyds Banking Group
The guide provides Boards with a practical resource that clearly signposts best practice in the governance of values and highlights the tools available to assess the executive processes which integrate values into the business’s day-to-day operations, ensuring that the culture of the organisation is reinforcing business strategy. The guide also illustrates best practice through the use of case studies, both from inside and outside of the City.
‘Governing Values: a guide for boards of financial service companies’ has emerged from the Lord Mayor’s Restoring Trust in the City Initiative was undertaken with and for the City Values Forum.

The guide focuses on the role of the board in setting corporate values, which are aligned to the business’s long-term strategy, and in ensuring that management promotes and embeds such values consistently all the way through the business to the “coalface”.
The guide was launched at the Lord Mayor’s Mansion House conference on the 15th of October 2013. 31 chairmen, non-executives, CEOs, company secretaries, general counsels and human resource directors as well as 9 additional experts and advisors were interviewed alongside other research.

As a result a model for governing values was created which highlights six building blocks which form the basis of best practice in the governance of values. The building blocks identified are: Inspiring through purpose and values; Aligning corporate strategy and organisational capability with values; Incentivising values-based leadership and behaviours; Measuring values through behaviours; Using values to guide decisions; and Promoting values –based leadership.
On the day of the launch the Governing Values guide was also the subject of an editorial piece by Anthony Hilton in the Evening Standard.