Recent decisions by AMP’s board and the subsequent pressure from shareholders, investors and the community highlight the inter-connectivity of reputation, values, relevance and leadership. A company’s reputation and values in words and actions work together to underpin a trusted, relevant brand at a point in time and over time.
Understanding each of these and how they interact is critical for business and personal success.
Warren Buffet noted back in 2014 that ‘We can afford to lose money – even a lot of money. But we can’t afford to lose reputation – even a shred of reputation.’
It’s been a tough several years for the banking and financial sector. While the large banks have copped most of the criticism, the superfund and financial advice segments have not come out unscathed.
While trust and transparency are mostly logically lined to high standards of corporate governance, robust operation controls and strengthened regulatory compliance, how companies position themselves now and into the future needs to reflect transparency, purpose, trust, responsible stewardship and engagement if they want to be at the forefront of their market.
It also means that at a personal level everyone needs to be clear about what their values, purpose and ethics are, and if the organization they are working for aligns with those or not, and if it’s the latter what action they will take to change it.
Much of what came out of the Hayne Commission was known by executives and boards for a long time, and if it wasn’t it should have been. So why were unethical, illegal practices allowed to continue for so long?
AMP is now close to losing its social license to operate given the mismatch between the board’s words and actions in relation to its performance against a number of Responsible Investing Principles, most visibly its treatment of sexual harassment in the workplace.
Knowing your own values, purpose and ethics and leaving a positive social footprint (working towards a better collective outcome based on respect and values) is critical for individuals and companies. When what you say doesn’t match what you do, the disconnect can result in loss of reputation, trust and business.
To reinterpret David Morrison’s phrase, ‘The standard you walk past, is the standard you accept. This goes for advice, insurance, commissions, bonuses, incentives, fees and charges, the way companies deal with sexual harassment, racist behaviours and discrimination as well as a whole range of things that executives might be aware of or made aware of frequently.
How relevance and values create leadership
Particularly now post Covid-19, we are living in a rapidly evolving business environment. Remaining relevant and in touch with market requirements is crucial, but so too is an authentic alignment of our values. Working out who to trust and how we can be regarded as trustworthy in such a complex environment is a genuine challenge. Understanding your own values is the starting point.
Values are perhaps the least discussed and most important element of relevance, reputation and brand strength at a point in time and over time – both personal values and that of a company (and the alignment of these.)
If there’s nothing else to be learned from the Hayne Royal Commission it is that being legally right and morally wrong equals being wrong, as the Australian Financial Review has stated during the uncovering of the AMP sexual harassment allegations. Values are important across all aspects of our lives – family, work, community, and country.
Relevance is important at a point in time and over time, especially in the super fund sector given the longevity of relationships (a lifetime) that companies want to develop with members.
Leaders in organisations make decisions that require a deep understanding of their own values as these inform the culture of the organisation. If leaders are not clear about exactly what their values are or those of the organisation they work within, these decisions will be much harder. If you’re not clear about your values, you might make the wrong decisions for you…for your reputation and/or for your organisation.
Leadership is about your words and actions – together these equate to your character. Over time the accumulated observation of your words and actions form the basis of what people say about you. You are responsible for your behaviours, but not how others perceive them. When these are aligned you are in the best space in terms of your reputation and as such you can have an impact on the areas of your work, family, community, and country should you wish.
Your values, actions and what you say will determine how others view, trust, support and continue to place their funds with you and your organisation . . . in short your personal reputation, relevance, brand and impact and that of the fund. As Zig Ziglar said:
‘If people like you they will listen to you, but if they trust you, they’ll do business with you.’
What are your personal views on this, and your organisations? Have you even discussed it?