A survey in 2011 of FTSE100 companies found that while 91% did refer in some way to ethics in their annual report, only 8% reported some form of measure of their company’s ethical performance.
It reflects a pitfall that most UK companies fall into: recognising that ethics is something they need to talk about, but failing to back up that commentary with any meaningful management information. It leaves investors having to guess the veracity of what is being said and creates a breeding ground for suspicions about the amount of spin involved.
Building a good set of performance measures can sometimes be a challenge – I once did it for the UK’s biggest insurance contract. Yet without meaningful MI, directors are unable to judge whether their company is progressing or regressing, going fast or slow, forwards or sideways.
‘Measure what you manage’ applies to ethics just like any other business initiative. Having advised a wide range of companies in the insurance and financial planning sectors, I am well placed to guide you to those measures that can really inform decision making.
Duncan is an independent adviser on business ethics, with a particular focus on the insurance and financial planning sectors. He worked in insurance for 18 years and has been an ethics adviser for 11 years. He's a Chartered Insurance Practitioner.