creating trust in public services - home | acca global€¦ · creating trust in public services...

Creating trust in public services

Andrew Wood

Pauline Schu

Paul Moxey

Stephen Emasu

Samantha South.ppt

Samantha South.ppt

Samantha South.ppt

Samantha South.ppt

The global body for professional accountants

Creating trust in public services.


• A pluridisciplinary literature review

• 10 expert roundtables on five continents

• 150 executives and practitioners involved

• An online survey of ACCA’s global membership

THE ACCA/ESRC RESEARCH PROJECT

Culture and Channelling Corporate Behaviour (ACCA 2014)


THE INCEPTION OF THE PROJECT

Consequences of the Trust’s

performance culture:

• Lack of openness and self-criticism

• Disengagement from management

• Marked bullying of staff

• Pervasive fabrication of records to

show compliance

UK Parliamentary inquiry into care provided by the Mid-

Staffordshire NHS Foundation Trust


2X Strongly disagreed in the Public Sector

DOES PERFORMANCE-RELATED PAY HELP FOSTER

BEST PERFORMANCE?


THE DESIGN OF PERFORMANCE TARGETS

1/3 thought performance measurement

systems worked equally well for the

organisation and the individual

Most respondents said they were involved in

setting their targets and objectives – and

happy with the way they worked in practice


PRP SCHEMES MAY LEAD PEOPLE TO FALSIFY

OR EXAGGERATE THEIR PERFORMANCE

Strongly disagree

2% Disagree

4%

Neutral 23%

Agree 40%

Strongly agree 31%

Public Sector

Strongly disagree

3% Disagree

8%

Neutral 20%

Agree 42%

Strongly agree 27%

Overall results


ACADEMIC WORK ON

PERFORMANCE-RELATED PAY

• Incentive-based pay schemes tend to suppress

conscience and encourage opportunistic behaviour

(Stout 2012)

• Financial incentives are not sufficient for motivating

executives (Pepper et al. 2013)

• Causal link between excessive pay and poorer

performance (Cooper et al. 2014ed)

Cooper et al. (2014 ed), ‘Pay for Performance? The Relation between CEO Incentive Compensation and Future Stock Price

Performance’, Working Paper

Pepper et al. (2013), ‘Are Long-term Incentive Plans an Effective and Efficient way of Motivating Senior Executives?’ Human Resource

Management Journal, 23(1): 36–51

Stout L. (2012), ‘Killing Conscience: The Unintended Behavioural Consequences of “Pay for Performance”’, Cornell School of Law


88% said to get more recognition for their work

83% said to have more challenging work

77% said to get a more senior position

5th in line: to earn more money

Least motivating: to contribute to the public good

WHAT WOULD BE MOST MOTIVATING?


1. To create an environment where people can

comfortably discuss any concerns

2. To ensure the organisation has an effective and safe

whistleblowing procedure

3. To sanction unethical behaviours

4. …

5. To have a code of ethics

WHAT MOST ENCOURAGES ETHICAL

CORPORATE BEHAVIOUR?


52% Agreed or strongly agreed

REGULATORY FRAMEWORKS ARE EFFECTIVE IN

DISCOURAGING UNLAWFUL BEHAVIOUR


HOW TO RESTORE TRUST?

• Balance rules and common sense

• Examine the incentives structure

• Beware of unintended consequences

• Find out what motivates people

• Promote bottom-up communication


Creating Value through Corporate Governance

- towards a new accountability


‘We are shocked and surprised that, even

after the ship has run aground, so many of

those who were on the bridge still seem so

keen to congratulate themselves on their

collective navigational skills ’

UK Parliamentary Commission on Banking

Standards (2013) into the failure of HBOS


• Governance and value

creation

• A new accountability

framework

• Culture and behaviour




• Governance should help ensure organisations

create sustainable long term value (this includes

managing risk).

• Generally governance practices and codes could

do a better job in supporting value creation.




WHY?

1. Confusion of what governance is for.

2. Governance requirements did not lead to a healthy corporate culture or effective boards.

3. Boards have less control than is generally recognised. Executives were unaccountable.

4. Risk management was problematic.

5. Governance was not viewed as a system.

6. Unreliable measures were used to manage performance.


Value

=

Profit




• Value should be measured in terms of

societal and environmental value as

well as financial value

• Good ethics and a good culture are

essential to good governance




• Governance practice should be assessed on how

well it helps in creating sustainable long term value

and ensuring ethical behaviour.

• Governance requirements should also be assessed

on how well they contribute to value creation (and

ethical practice).

• Accountability framework - performing, informing

and holding to account


Accountability Framework for Governance - 1

The purpose of governance is to ensure

organisations create long term sustainable value


Accountability Framework for Governance - 2




What can stop it?


Cultural Trade-Offs

Innovation x Control

Risk seeking x Risk avoiding

Protection x Production

Common sense x Rules & procedures

Empowerment x Rules

Trust x Accountability

Leadership x Followership

Cohesion x Dissent

Openness to

mistakes

x Zero tolerance

Short term x Long term

Big boards x Little board

Independence x Involvement

Value driver x Value protector

Profit x Public good


For further information,

please visit:

www.accaglobal.com/culture

http://www.accaglobal.com/culture


Paul Moxey

[email protected]

Pauline Schu

[email protected]

CONTACT

mailto:[email protected]

mailto:[email protected]


Thanks.

Dr Andy Wood OBE

Chief Executive - Adnams Plc

Trustee - Tomorrow’s Company

New Reporting Developments

Chris Ridley

Samantha South.ppt

creating trust in public services - home | acca global€¦ · creating trust in public services...

Documents