At the ICSA UKRIAT AGM on 8 February the theme of confidentiality was raised. Security breaches at TalkTalk and HSBC were mentioned, as well as Volkswagen’s falsification of emissions tests, albeit in a different vein. It must be asked, where was good governance in these cases?
Credit Suisse and Barclays were also recently fined heavily for so-called ‘dark pool’ operating by US regulators, despite Barclays’ stated commitment to governance in its annual report.
Presumably the US regulator has wider powers and is better funded than UK’s public sector enforcement, which is arguably weak and underfunded. There have been suggestions that the regulator has insufficient powers to intervene with the way supermarkets treat their suppliers.
Two recent events have caused condemnation of UK enforcement: HMRC agreed a tax settlement with Google and the Crown Prosecution Service lost a long-running case against six traders – a tab paid by the taxpayer. More funding for the public sector may have enabled better-worded legislation, which would have allowed greater analysis of risk in accordance with the protocols of good governance.
Unless there is a regulator with teeth like the jaws of a crocodile, attention to good governance will be seen as perfunctory: something to set down in sentences to match a template but no more.
Perhaps the principles of the UK Corporate Governance Code should be incorporate into legislation. Whether this would bring integrity to organisations in all sectors is debatable, however, there is a need for more stick and less carrot. Overcoming this challenge may bring victory to ICSA.
There are a number of ways ICSA may do this. For example, by ensuring that examinations at all levels are heavily geared towards governance and strengthened with vigorous continuous professional development; allowing candidates to be proficient in two streams; and lobbying legislators to develop a provision which requires organisations of a certain size to have an ICSA-qualified governance professional.
The ICSA qualification was embodied in section 79(2)(e) of the Companies Act 1980 but not in a monopolistic position. Contemporaneous to the success of the change in the law, ICSA should have qualified members sufficient in number to meet demand. It is essential that ICSA steals a march on its professional competitors.
It is essential that the state makes a better commitment to good governance. This could be the basis to the ICSA’s stand, yet it may be the other way round: is ICSA’s stand the basis to the state’s commitment to good governance?
Up and coming generations seek a qualification that will secure for them employment in a highly-paid career. If ICSA hits the right notes at the right time then our students will be well rewarded for their efforts in passing our exams… and that in itself would be a good enough reason to be a member of ICSA: The Governance Institute.
|Royston Pert FCIS is a Fellow of ICSA: The Governance Institute|