Liz Pfeuti, chief client officer at Rhotic Media, explores the consequences of overlooking comprehensive governance and safety regulations.
On this glorious, warm and sunny afternoon, there are three lads erecting scaffolding outside my neighbour’s house. Aside from peppering the air with gossip about the latest Arsenal signing – the club overpaid, by the way –they are happily hopping about the rungs and boards like mountain goats.
They’ve popped around to ours to make sure there are no swifts nesting in the boxes close to where they’re building, and are they OK to cut down a couple of branches of shrub? Yes, the bees are done foraging, so saving it saves me the job.
I’m glad they are keen to protect the environment.
However, there’s not a hard hat, glove or harness between them as they happily toss the bolts and hinges into a plastic tub on the truck, which is parked on the busy main road.
The nosy neighbour that I am, I peeped at the company website to have a look at the health and safety assurances they offer, along with the rules and regulations they should follow when erecting three storeys of boards.
There’s not much evidence of these decrees being heeded in real life, but it’s a relatively small job, and they’re professionals, right?
The lads had everything up and secured by 4pm, taking their football chat and skilled clambering and fixing techniques away with them. The scaffold looks entirely safe for the roofers to scale next week, to the untrained eye at least.
But it’s the process and the governance framework that needs closer attention.
It’s said it’s better to be lucky than good, and this can apply equally to all professions and endeavours.
But taking a safe and professional approach to everything from erecting scaffolding to selecting assets for a portfolio sounds to many like the most sensible approach. Equally, I suspect workers up and down the land think that’s what they do every day – up to a point.
The scaffold lads worked like lightning and didn’t put a foot wrong. They probably assumed – and, with no major incidents reported lately, with good authority – that they didn’t have to completely stick to the cumbersome health and safety guidelines that may have slowed them down.
Over almost 20 years, countless fund managers of all stripes and types have told me that “governance” is implicit and built into their process. It’s not something they spend as much time on as, say, environmental concerns, as they only buy good companies.
Great.
It’s important that someone is really caring about global shifts in climate and biodiversity as closely as those lads worked around our swift boxes.
So, I’ll be happy to hear that their names as shareholders of all the companies – including the banks – that have collapsed over the past year were false entries on the register. Or, if not, I’d be keen to read about their intensive stewardship efforts to discover what was really going on, not just in the boardrooms but within the activity throughout the company that their investors’ capital was facilitating.
I’d also love to hear how managers deal with auditors who fail to adequately do their job. Answers on a postcard to that one.
Governance is not implicit. It doesn’t just happen. It is something that needs constant appraisal and work and should operate like a culture through a firm.
By reaching for the headline-grabbing environmental targets and failing to directly grapple with governance, it is not the company directors and fund managers who lose out; it is the lads climbing the scaffolding and the people whose capital has put them there who ultimately pay the price.
There were helmets, gloves and harnesses in the back of the scaffolding truck – the lads just didn’t use them.
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