Five of Britain’s biggest organisations were cross-examined about corporate reputation and customer service at the CBI Annual Conference on Monday.
Senior bosses from BAE Systems, BBC, Centrica, RBS and Sainsbury’s were quizzed at CBI’s annual conference about their efforts to rebuild public trust following a low period for corporate reputations.
Chairman of RBS Sir Philip Hampton said there was a “crisis of trust” in his industry and that RBS was working to repair the damage. All 120,000 RBS staff were being put through the “sheep dip” process for code of conduct standards.
“Code of conduct has tended to sit in the bottom drawer. Instead of saying you must act with integrity, which is meaningless to an awful lot of people, we are saying imagine you are selling this product to your mother or father; would you live with yourself if it went wrong or became inappropriate,” he told his interrogator, ITV’s Laura Kuenssberg.
Sir Philip added that the reputational weakness of the banking industry in the UK got so bad that a parliamentary commission was set up to look into it, “a rare event in this country”. Among other recommendations made by chair of the commission Andrew Tyrie was the proposal for a new criminal offence for the “reckless management of a bank, suggesting that bad bankers should go to jail”.
Since then, Sir Richard Lambert has been appointed by the chairmen of the Big Six banks to set up an industry standards board. The entire banking and finance industry has no devoted regulator for standards, unlike other professions of comparable size, and Sir Philip welcomed the move.
He said that the independent review the banking industry commissioned Sir Andrew Large to conduct on lending practices concluded that banks have become too risk averse, across the baking sector and certainly at RBS. “Sir Andrew says that it no surprise, given that we were lending to anybody with a pulse five years ago, so there is a process of correction taking place. We were basically taking on clients that other banks rejected in the run up to financial crisis.”
The BBC’s director-general Lord Hall said that had gone through a period of soul searching in the wake of reputational damage a year ago, referring to the Newsnight child abuse broadcast that led to the resignation of predecessor George Entwistle.
He said he had tried hard to build bridges and had travelled up and down the country from Plymouth to Orkney to get to know people in his organisation. He said “sometimes people just appreciate a ‘thank you’ for doing a good job. Also when you meet people on the ground you really get to know the inner workings of your organisation, and what they think of the organisation.”
Last week horse meat was again found in beef products in retail outlets and, while this was not at Sainsbury’s, Miss Kuenssberg asked CEO Justin King how his industry deals with reputational risk with such everyday customer contact. Mr King agreed with RBS’s Sir Philip, and that there was a crisis of trust in the supermarket industry too.
“We are seeing an important separation between people’s attitudes to the individuals they deal with and can identify, via social media for example, and the organisations they work for,” saying therefore the crisis must be in leadership.
“The problem business has is I still hear too much rhetoric that not too much wrong was done, and what has been done now is now in the past,” paraphrasing Barclays’ ex-CEO Bob Diamond’s famous comment about the “time for apology is over”. “The time to move on is when our customers or our voters tell us that trust and confidence in our values is restored. That is a crisis of trust.”
Mr King reiterated that everywhere you look in society, people tend to trust the individual – such as policemen, doctors and nurses – but not the organisation they represent, and this is what big business had to focus on mending. “Grocery retailing is one of the more trusted of big organisational sectors in the UK, but still the scores are appallingly low if you aspire to being 100% trusted.”
Centrica’s CEO Sam Laidlaw admitted upfront that “trust in the energy sector is at an all time low”, saying that the solution is in actions not words.
“It comes down to people helping each other. Our own people who help customers with their bills and their boilers, and those who rightly expect their homes to be warm and well-lit.” He said transparency was the starting point but that energy companies did not have a good track record here. He said companies need to try harder to explain how energy bills work and the (supplier) switching process needs to be improved.
But he added “transparency is not enough for people who cannot afford to pay their electricity bills”.
He justified recent rising costs because the firms like Centrica have to balance three conflicting demands; to assure supply, to reduce carbon emissions and to keep energy affordable. “We can’t forget the first two but it’s the third one that is the key priority for our customers.”
He backed Lord Hall’s approach to visiting call centres, shadowing call centre teams and listening to customers’ concerns directly. He said more Centrica staff were being trained to help customers with their bills including a level of financial management advice, “particularly with helping people get out of debt and with new payment schedules.”
Mr Laidlaw emphasised strongly that Centrica’s maintenance teams provided very high levels of service, “tens of thousands of engineers, visiting households and elderly people’s homes every day, to restore heat or light.” “We have 10s of thousands of people who come to work every day trying to help customers and treat customers fairly.”
Miss Kuenssberg pushed the Centrica boss on the Big Six energy firms’ pledge last week in the Commons Affairs Select Committee that, if the government rolled back green levies on energy bills, that saving would immediately be reflected in customers’ bills. Mr Laidlaw said yes, they would.
BAE Systems’ chairman Sir Richard Olver admitted that he had a lot of experience in crisis and reputational management after 10-years at the defence contractor. Change management, to inculcate gold standards of behaviours, in a company of over 100,000 employees in 24 time zones was a “huge challenge”, he said, that requires the simultaneous alignment of several essential strategies (for more of Sir Richard’s comments, go here).