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It's All About Trust (So All About Transparency)

Posted on October 4, 2013 at 10:15 AM

'Trust' is the word of the moment. Readers of this blog will remember that when the corporate tax rows started to rumble in recent months and it got to Apple (which some of us feel is the family we do not have), I said it was not about tax, it was about trust. Well, it really, really is.

Which is why those attending the PwC Public Trust awards recognising transparency in corporate reporting and the need to build and rebuild trust on an ongoing basis were keen to win a gong. The awards, by the way are in their 11th year - a panel of independent judges decides who wins.

There were 300 business leaders, senior politicians and civil servants and regulators present - so senior in fact, that inevitably it seems the bulk of them were men.I realised that award ceremonies like this often allow a 'plus one' - this one didn't, as one man complained to me - which means it was a more accurate representation of those in power. More women needed.

"It is clear that business needs to engage with society to build trust. Business is all too often depicted as not benefiting society, but as selfishly pursuing its own interest regardless of the costs to other. which is profoundly at odds with the actual values and behaviours of the vast majority of people working in commercial organisations and public institutions" said Ian Powell, PwC Chairman. 

Transparency in reporting is one very important factor in the establishment of trust. Here are the winners:

Excellence in Reporting in FTSE100  Winner  Anglo American

Highly Commended: National Grid, The British Land Company

Excellence in Reporting FTSE250   Winner The Go-Ahead Group

Highly Commended: African Barrick Gold, Great portland Estates

Excellence in Reporting in the Public Sector (awarded by PwC w/ National Audit Office)

Winner: The Crown Estate

Highy Commended: Defence Science and Technology Laboratory, Environment Agency

Overseas Award : Towards Integrated Reporting

Winner: Gold Fields (South Africa)

Highly commended (in alphabetical order): Novo Nordisk (Denmark), PotashCorp (Canada), Schiphol Group (Netherlands)

Speaking of trust, it's important everywhere - I had these results before I attended the dinner - which was an act of faith on the part of the PwC press team, as there was a clear embargo. 

South Africa was well represented - it was a great pleasure to meet Mervyn King, Chair of the International Integrated Reporting Council. It's also interesting how much the mining sector features in improved transparency.

Richard Lambert (former director -general of the CBI and my ex-editor at the FT whom I remember as being both supportive and kind to a pretty scared 23 year old) was there as well. Now he is another individual on whom the responsibility of creating trust has been bestowed, by Britain's biggest banks, no less. He is to set up an independent body monitoring standards within the industry.

Mingling with the guests I had some interesting conversations around public sector recruitment. It really isn't an obsession of mine - but as we spoke about boardrooms, and NED pay, we also spoke of headhunters - and the quick consensus appeared to be a 'waste of space'. "When I saw the list I said -well, I could have given you those names" said one senior business figure.

But going back to corporate reporting - the debate continues on accounting standards. Or at least the UK's lead accounting regulator, the FRC, has just published a legal opinion by Martin Moore, QC, backing the government's case for the IFRS, the accounting rules followed by plcs in the UK and the rest of the EU. British critics don't agree - and it ain't over yet. If you can access the FT, here is a link that tells you more.

The thing is, 'trust' is not something that you get, like a prize - and then leave on the shelf for everyone to admire. It has to be fed or it evaporates. You could say it comes with a pretty short-term sell-by date. So, apart from awards, businesses need to keep determining their own culture, and keep feeding it correctly so it does not go rogue.

At PwC an important hire in the 'establishing trust' effort has been Margaret Cole, General Counsel and a member of the executive board. She was the now defunct FSA's former managing director of enforcement and financial crime, the first managing director of the conduct business unit and a member of the board. In her seven years at the FSA, she helped the regulator win its first criminal convictions for insider dealing.

She joined PwC a year ago at a critical time of regulatory change with implications for the organisation. I interviewed her about six months later for the FT, and you can read that interview here - it might help explain why I think she was also hired for the "trust" factor. 

And one more thing strikes me about Margaret Cole - I haven't seen her name either on all these lists that are available to headhunters to help them do their difficult job in finding women for the boardroom. Maybe if they did their job better there would have been more women in Dorchester ballroom last night.

Have a great weekend all.

Categories: Accountability, Scrutiny, Transparency