Tags: Corporate governance, Ethical Values
Lord Evans, Chair of the Committee on Standards in Public Life, discusses how public standards remain crucial for private sector providers.
In the Hugh Kay Lecture I delivered on 11 November, I reflected on the clear overlap between public standards and business ethics. It is no coincidence that many of the principles we expect in public life also apply to business. But for some companies observing the Nolan Principles is not a choice but an obligation. In 2013, the Government clarified that any organisation contracted to deliver public services on behalf of the taxpayer is subject to the Seven Principles of Public Life.
The need for public service providers (PSPs) to uphold the Seven Principles is not just rooted in Government policy. Research undertaken for CSPL revealed that the public does not always differentiate between providers - be they public, private, or voluntary - but that they want all providers to operate to common ethical standards. Key standards outlined in that research mirror the Seven Principles. The public expects PSPs to deliver services with the public interest in mind, and for there to be transparency and accountability when failures occur.
In the Hugh Kay Lecture, I argued that the Seven Principles of Public Life outline the appropriate use of entrusted power, creating an implicit ethical contract which holds regardless of who is exercising public authority. If the Government decides to empower a private company to deliver a public service, that company takes on the responsibility to uphold that ethical contract - and therefore the Nolan Principles. In CSPL's 2014 PSP report we recommended ways in which Government can outline these responsibilities in practice, calling for greater clarity on public standards in commissioning and procurement. Government must also ensure that contracts are awarded fairly in the first place. The recent NAO report into Coronavirus procurement demonstrated that there is public disquiet when there is a lack of proper process in the use of public funds.
Translating the Nolan Principles into a business setting is not always easy. Some PSPs express a level of corporate discomfort with the Principle of selflessness, requiring companies to act in the public interest - rather than stakeholder interest alone. But as the IBE's Mark Chambers convincingly argued, companies are now realising that the primacy of shareholder interest does not preclude a company acting on its social responsibilities, be that in ESG, public standards, or elsewhere.
Our guidance for PSPs published alongside the 2014 report seeks to help PSPs integrate ethical standards into their everyday operations. It identifies a need for providers of public services to evidence Board and individual responsibility for ethical standards, for the introduction of control and accountability measures for ethical matters, and for the integration of values and principles into recruitment, induction and career progression.
Perhaps most importantly, the guidance stresses the importance of leadership. Leaders set norms, and norms form culture. The tone must come from the top. We advise that a company's senior leadership should make regular, public statements on the importance of high ethical values, they should demonstrate a visible commitment to high standards, and they should be willing to be held accountable for standards within their organisation.
Public services touch the lives of millions of Britons every day. Their quality can determine our collective and individual wellbeing. Services like waste disposal, construction, health and social care, transport, court, probation and prison services, catering, education and employment assistance, are increasingly supplied to many of us by private organisations and paid for with public funds. We need to ensure we have strong and robust cultures of ethical behaviour in all organisations delivering public services. We know that is what the public expects.
Listen back to the recent Hugh Kay Lecture...
Author
Lord Evans of Weardale
Chair, Committee on Standards in Public Life
Jonathan Evans is currently Chair of the Committee on Standards in Public Life, (CSPL) which advises the Prime Minister on ethical standards across the whole of public life in England. It monitors and reports on issues relating to the standards of conduct of all public office holders. Often referred to as the Nolan Committee, it promotes the 7 principles of public life – honesty, accountability, selflessness, openness, leadership, objectivity, and integrity. These principles, widely known across the public sector, apply to companies and charities delivering public services too.
Jonathan Evans spent 33 years in the UK Security Service, six as Director General. During his career he has worked on counter-espionage and counter-terrorism, both international and domestic, including initiatives against cyber threats. He retired from the Security Service in April 2013. He was appointed as a crossbench peer for his contribution to public service by the Prime Minister in 2014 and was appointed Knight Commander of the Order of the Bath in the 2013 New Year Honours List.
He is also a Director of Ark Data Centres Ltd, Chair of the Public Interest Committee of KPMG UK, Chair of the Kent Search and Rescue charity and is a Deputy Lieutenant of Kent.