Dig deeper

February 13, 2018

In spite of all the hullabaloo about Oxfam, let’s remember first that the appalling behaviour in Chad and in Haiti does not suddenly make the organisation a bad organisation.

 

Oxfam does wonderful work on behalf of the poorest and in the face of terrible war and famine. We should count ourselves privileged that it does.

 

And how refreshing that the senior executive responsible at the time has taken responsibility and resigned. That too reflects well on the organisation.

 

And yet, there are lessons to be learned.

 

There is a familiar ring to the Oxfam story. I’ve followed many similar stories in the business world over more than two decades.

 

It starts with investigation and revelation. Skeletons fall out of cupboards.  The regulatory authorities spring into action, demanding explanation. The CEO tries to explain the difficulty and takes prompt action.

 

Then the attention turns to the governance. How was this scandal allowed to happen? It turned out that people in the organisation knew about it. As I said in the piece I wrote about Enron 16 years ago

 

The common feature of nearly every corporate disaster is that afterwards, you will find good people inside the organisation who will say,” If anybody had asked me I could have told them something was not right.”

 

And today we learn that Helen Evans, a former head of safeguarding had told Channel 4 News that she had warned Mark Goldring, Oxfam’s chief executive, of a potential “culture of abuse” in some overseas Oxfam offices, but that her requests for additional resources had been rejected.

 

And then the attention turns to governance. If people inside the organisation knew, why didn’t the directors know?

 

It isn’t easy. Wrongdoing exists in every organisation. What matters is that those at the top, whether executives or non-executives, are very open in encouraging feedback and very quick to respond when they get it. The risk is that people in the know get to assume that people at the top either know already what’s wrong or don’t want to know, and therefore that there is a big danger in flagging g a problem.

 

As I put in Lessons from Enron

 

Boards: you are the company’s ethics and risk committee.  Clear your agenda so that there is time for the serious examination of corporate values and the gap between what is preached and what is practised in your company.  It may tell you more than the report of the audit committee.  Ask repeatedly what kind of behaviours and what kind of managers get on round here?  Do the answers fill you with confidence?  If not, dig deeper.

 

As chair of Oxfam, Caroline Thomson will certainly need to ponder the significance of those words. I would commend to her something that Tomorrow’s Company wrote with the City Values Forum two years ago. It is called Governing Culture and it offers very practical guidance to boards – whether of companies, charities or government bodies – who don’t want to be sitting where Oxfam are sitting today.

 

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