Margot James MP: how do you get your voice heard in company boardrooms?

business meeting

Consumer Minister, Margot James MP, joins us to explain more about the Government’s review of corporate governance, and ask you: how do you get your voice heard in company boardrooms?

Britain has a strong framework of consumer protection and millions of companies take the integrity of the products and services they supply seriously.

But some companies don’t, and even when they have the will to make good when things go wrong, there are still too many instances of inadequate redress.

So how do you – the consumer – make sure companies hear your concerns at boardroom level?

Corporate governance reform

This Government is committed to making Britain one of the best places in the world to work, invest and do business. And a big part of that is making sure companies operate in a responsible way, taking into account the interests of its shareholders, employees and you – the consumer.

At the end of last year, we launched a consultation on how to make sure all businesses are run as responsibly as the best of British companies already are, in the Corporate Governance Reform green paper.

We’ve already received responses from businesses, but it’s just as important to hear views from the public too – and that’s where you come in.

Responsible business

This Government is determined to make sure all companies operate as responsibly as the majority do already, and play their part in building an economy that works for everyone.

Having set up and run my own business, I know it makes sense to listen and act on customers’ opinions.

At the moment, all company directors are required by law to run their business responsibly. This includes taking into account the interests of their employees and the company’s relationships with suppliers and customers.

Now, I imagine you don’t want to spend your spare time leafing through companies’ accounts to check if they’re being run responsibly, which is why it’s great to see Which? working with businesses to help them better understand how they can and should be engaging with consumers.

But we want to go one step further and make sure the UK isn’t only the best place to do business, but where consumer and workers’ views are heard in the boardroom and acted upon.

Share your views

And with only a few days to go until the consultation closes, we want to make sure we hear your opinions. Your views could shape the future operation of businesses.

I’m delighted to be working with Which? to promote the Corporate Governance Reform green paper and ensure we capture your views. So thank you in advance for your contributions and comments on this conversation, which will be fed into the consultation before it closes on 17 February 2017.

This is a guest contribution by Margot James MP, Minister for Small Business, Consumers and Corporate Responsibility. All views expressed here are Margot’s own and not necessarily those shared by Which?.

Which? will be compiling your comments to be fed into the consultation before it closes on 17 Feb. So, tell us, how would you like your voice heard in company boardrooms?

Comments
Profile photo of Ian
Member

Perhaps businesses ought to be required to establish an ethics ‘filter’ committee, through which all proposals would have to be taken. The committee would have to have carefully conceived criteria and possibly legislation to back that up.

Profile photo of Simon Markall
Member

Thanks Ian

Interesting view on having such a committee. Some businesses do have customer challenge groups or groups that aim to represent the consumer but it interesting to hear that you feel maybe legislation would be needed.

Do you have any views on who could sit on such groups and how we could ensure they reflect all consumers views?

Its one area I’m really interested in, having had experience of such groups in the water sector.

Profile photo of Ian
Member

I would expect those with experience at senior management of organisations such as CAB might be invited. Obviously consumer groups such as Which? would also need to be represented. The committee would have to have a department, responsible for collation and presentation of potential issues to the committee, whose job it would be to bring pertinent matters to their attention.

Profile photo of malcolm r
Member

My initial, and grumpy, reaction to this invitation is this. The consultation document was issued on 29th November 2016. The consultation closes on 17th Feb – in 4 days time. There are 59 pages of information to digest. So how are we supposed to discuss and make considered responses, and how are Which? going to collate them properly, in that time? Why leave it so late?

Off the cuff, shareholders should be presented with senior members’ proposed total pay packages with justification and, as they are the owners of the company, their majority decision should be binding. They should also consider whether bonuses should be based on achieving long-term objectives. This could be applied to public bodies and charities also.

Profile photo of Simon Markall
Member

Hi Malcolm – sorry to hear that. I’ll be honest with you we’re looking at supporting BEIS, through this convo, towards the end of this consultation so they get real consumers views of corporate governance. It is a great chance to feed in any initial ideas and thanks for yours.

Do you have a view on how consumers could be engaged by corporates and their Directors to demonstrate that they are delivering under their obligations? As the Minister has said I can’t imagine many of us enjoy reading the annual reports of the companies we deal with on a daily basis – I think i’d prefer to watch paint dry – but should and how can these companies engage with us, as consumers?

Profile photo of malcolm r
Member

Thank Simon. I’d like to see an independent body that not only looks routinely at company performance and reports to the public on misdemeanors, as well as taking action, but actively invites the public, customers and employees to report issues that they consider to be of concern. If you read Private Eye you will find such reports occasionally appearing. One problem will be who acts as judge and jury when our public sector also behaves badly at times?

Annual reports are. of course, sanitised and unless you are a direct shareholder (most will be through nominees) you won’t see them.

The bulk of the reforms seem to focus on boardroom pay. There is, in my view, a mistaken belief that you have to pay for the best (I believe many have a less mercenary outlook) and that indeed this really does attract “the best”. However, individuals and working owners of companies large and small are free to take as much money as possible from their enterprise, partly because their investment and talent has been risked. Employed directors are not in this position and shareholders should decide their remuneration; guidance on acceptable limits may well result in those limits being applied as a norm. I would like to see a substantial proportion of their salary being paid in shares, at current prices, with a requirement that they be held for a certain number of years. The long term health of their company may then determine their objectives, rather than short term gains. (I wish politicians could be paid on the same basis 🙂 )

Profile photo of John Ward
Member

I have read a good few company annual reports in my time, many from consumer goods producing companies, and I am afraid that generally, in the narrative, there is not much said about ethical matters or social responsibility issues. There is a page or two of the statutory ‘corporate social responsibility’ report but even the tobacco companies manage to paint a rosy picture of themselves! Annual reports are addressed to shareholders, not customers or consumers, and are high on new product developments and profitable activities but short on anything revealing about the company’s general standards of behaviour [unless that is one of their hallmarks as with The Body Shop before it sold out to L’Oréal]. Most high street companies seem to be owned by hedge funds, corporate investment vehicles, offshore trusts, and other remote or invisible backers so they don’t issue public documents for review. I think if we can’t see what companies are doing on the inside I think we must beef up our efforts to call them out from the outside as soon as they act against the public interest. Private Eye does a good job in that respect but lots of other dubious dealings go unreported. Even bad eggs sniffed out through Which? Conversation seem to get away with it for years, partly because consumer protection and trading standards are so weak and under-resourced. Let me mention Curry’s PC World for one and their duplicitous selling of laptops that goes on and on and on without any abatement despite media attention, and that is because the barrow-boy mentality is ingrained in the corporate culture. If for legal reasons we cannot name and shame the bad companies, let’s make a comprehensive list of the good ones and remove them if they put a foot out of line. Instead of the Rich List [P. Green & Co], how about the Which? List?

Member
MIKE SECKERSON says:
18 February 2017

On the 13 of February 2017
malcolm r wrote:
“My initial, and grumpy, reaction to this invitation is this. The consultation document was issued on 29th November 2016. The consultation closes on 17th Feb – in 4 days time. There are 59 pages of information to digest. So how are we supposed to discuss and make considered responses, and how are Which? going to collate them properly, in that time? Why leave it so late?”
Malcolm’s initial and grumpy reaction is entirely justified. Four days is not quite enough time to consider, and perhaps translate from political newspeak into English, the 59 page document. But it gets better:

I’d answered ‘yes’ to the starter-teaser about the deadly Whirlpool dryer before noticing the closing date for the ‘competition’. It was yesterday!
‘Oh, silly, busy me,’ I thought, turning to the Inbox, ready to flagellate myself for the error. In fact, the item arrived at 9:57 this morning.
‘Hmm,’ I thought, ‘if Which? were in business they might expect the customers to complain.’ They are, and so I have. Come on, guys; get yerselves a calendar or something.
Jacquelyn Hyde (aka mike@qwerpoiu)

Profile photo of duncan lucas
Member

I am glad to see there is an actual government department working for small businesses , as they are far from happy living in the assumption that all HMG cares about is big business . Many laws +legislation don’t work for the small business , it may surprise some that I am defending the business side of the public but I have seen how many small businesses are put at a disadvantage in terms of– they do a contract job for big business and then — have to wait —and wait –and wait for payment from big companies , many failing in the meantime or organisations going bankrupt to save themselves a payout while the owners of the failed company seem to “resurrect ” themselves into another organization which must be a miracle as they have said -“we have no money ” If you are genuinly committed to making the UK a “better place ” for ALL its population why has it been made harder for the general public to get redress by “Liberalizing ” the social+economic processes of this country into a distinct advantage and protection for big businesses thereby causing large scale public unrest when businesses take a high handed view of who is to blame when something goes wrong saying-something wrong -TOUGH ! and bounce you back and forward between so called public “help ” departments that have been well and truly “de-clawed ” working to the distinct advantage of the companies and not the WHOLE of British society . If this country is becoming “Americanized ” then I demand American social protection where the US Administration puts the public first and really helps them not a “pseudo ” version like in this country that puts up labels that aren’t worth the paper they are printed on . This messages “Third World ” practices not First World. By the way ANOTHER =Internal server error , I now keep the Web page up and use another browser to see if it gets posted I do not expect to be able to reply early to any comment on this due to this blocking action by Which.

Profile photo of Simon Markall
Member

Hi Duncan

You maybe interested to see that today the Department of Business, Energy and Industrial Strategy (BEIS) have started to process for hiring the first Small Business Commissioner – https://twitter.com/beisgovuk/status/831141045635276804

You make a really interesting point about small businesses (in many ways small businesses often act like household consumers).

On your point about redress. The Government are going to be doing some work going forward on different markets, and hopefully redress might be included as part of that. In last year’s Autumn Statement, the Chancellor announced that the Government would be looking at markets that don’t work for consumers. I’m sure there is another convo in that down the line.

Do you think you’d need “social protection” if consumers could have confidence that the businesses they dealt with on a daily basis were taking their priorities into account?

Profile photo of duncan lucas
Member

Thank you for your reasoned reply Simon I am glad to see that some action is being taken on behalf of small businesses not always a practice in the past as this world turns towards globalization via conglomerates /massive companies .If the entrepreneurial spirit is taken away from society then that society dies a slow death . As regards “public protection ” I mean HMG standing up ( and showing it ) in defence of the public due to the excesses of large companies , having spent a long time talking to Americans, reading up on their social justice in relation to the help they get from their government in defence in LAW relating to any injustice I am left in awe at the very good treatment provided from all departments of US government it seems to me a paradox that the Home of Capitalism better protects its ordinary citizens than Britain where HMG “copies ” US actions but not allowing the British citizens the same government help as their counterpart-US citizens . If the road we go down is conformity to American commercial principles then surely we deserve American government protection at all levels of society ?

Profile photo of alfa
Member

One of the biggest gripes from a customer point of view is lack of being able to contact companies.

Website fill-in forms should not be the only means of contact. They are often restricted in size, you can spend ages filling them in for them to come back with ‘error’ and if you didn’t copy your text, you have to start all over again. Very often these forms don’t work at all and you have to wonder if it is to put you off with your complaint or query. It also means there is no valid record of communication if you have to prove previous discussions.

Every company should have real email addresses and free or local rate phone numbers that are displayed prominently on their websites.

When companies respond to a query, they should also not use email addresses that cannot be replied to.

Profile photo of malcolm r
Member

I agree with that alfa. If you can write to them you should also be able to phone then and email them. I use CEOEmail.com when I need to dig out an email address – it works a lot of the time.

I would also like email addresses to be published to directly contact government departments and other public bodies and, also, not to be told when I do that it can take 28 days to receive a reply. A to-and-fro interchange can last for months by which time you’ll have lost the will to live – probably why they do it.

Profile photo of alfa
Member

CEOemail.com is very useful but would be even better if kept up-to-date.

After getting nowhere with a company’s customer service I emailed every person of note I could find with that website as a starting point. Then emails were falling over each other to help including the previous unhelpful customer service that must have had a kick up the posterior.

It does go to show how far removed boards are from their companies sometimes.

Profile photo of Simon Markall
Member

I think we’ve all been there and felt very frustrated when we can’t find anyone to talk to, email, or just generally deal with our compliant. In many ways if companies dealt properly with consumer complaints then the need for such websites as mentioned above would be reduced.

I suppose the big thing here is a challenge to CEOs and company boards, in that how do they better understand consumer priorities so that consumers don’t have to go searching for emails when things go wrong.

I’m not sure a change of the law to get every organisation to publish emails/numbers is needed, but how about a change in board attitude towards consumers?

Profile photo of malcolm r
Member

CEOEmail.com is, I understand, dependent upon voluntary subscription. It is a very useful service. It has been suggested in the past that it would be very useful if Which? published a directory of contacts at major companies. Perhaps they could join forces?

Changing attitudes of anyone – individual or corporate – is very difficult, as we see from Convos. Best to apply rules. Why not make appropriate contact details a legal requirement under the Companies Act?

Profile photo of alfa
Member

If you have purchased a service or product from a company, you should be able to easily contact them, so perhaps there should be a change in the law, and as malcolm says make it a legal requirement under the Companies Act.

Profile photo of william
Member

I’ve started taking issues direct to CEOs. 3 -4 years ago I emailed the then CEO of Tesco, an action plan of around 10 items I felt his company could address. So far they’re implemented 2. Last year I emailed the new CEO of Tesco of the lack of recyclable materials used in packaging and how Tesco if they adopt the idea could be seen to be a leader than than just another sheep. Again nothing has happened.

I notice today MPs want companies to be more honest about shrinking products, then was one of the 10 originals ideas.

I’ve frequently emailed the CEO of Royal Fail, one comment was if I had been a member of the Royal family I’d have removed the Royal from their name, after a recent incident in which a Royal Mail 48 package took 15 days to arrive, I wrote another letter suggesting that as I have numerous working experiences of how Royal Mail fail I’d be ideally placed to tell then how to sort them out. They declined.

I can imagine companies will resist having customers on the board until they’re forced to.

Profile photo of John Ward
Member

As soon as a new director joins a company board [and they mostly come from other companies] they get smoothed into the mould so that they toe the company line at all times, don’t hear any whistles being blown, pay no attention to employee reports, and completely disregard any customer complaints [that’s operational, not corporate policy-making].

As regards small businesses, I would guess that most proprietors and senior representatives are natural Tories and are looking to this government to give them a break. But can they be trusted to act responsibly in return? It’s wrong to generalise, I know, and there are thousands, if not hundreds of thousands, of small companies in manufacturing and trading that are honest, respectable, decent, fair trading, and socially responsible that source products ethically, pay good wages, employ apprentices, serve on local organisations, don’t charge exorbitant prices, and evade no taxes. One or two have submitted comments to this site over the years and it’s a breath of fresh air, but there are others who I regret to say are a disgrace to the world of small business.

Profile photo of duncan lucas
Member

John- your not likely to hear “many whistles being blown ” as it looks like legislation will be introduced in the future jailing any whistle-blowers for 14 years, the NUJ are not “happy bunnies ” about this where they could be charged with “acting against the State “- Traitors-etc and hung -drawn and quartered in the pro government media . While big business maybe isn’t in the same league it insidiously puts you under pressure to keep your mouth shut . I doubt I would live that long.

Profile photo of John Ward
Member

What legislation is that, Duncan?
According to the government website “Whistle blowing for employees” :
You’re a whistleblower if you’re a worker and you report certain types of wrongdoing. This will usually be something you’ve seen at work – though not always. The wrongdoing you disclose must be in the public interest. This means it must affect others, eg the general public. As a whistleblower you’re protected by law – you shouldn’t be treated unfairly or lose your job because you ‘blow the whistle’. You can raise your concern at any time about an incident that happened in the past, is happening now, or you believe will happen in the near future.

For more see :
https://www.gov.uk/whistleblowing/what-is-a-whistleblower

Is the government proposing to restrict this protection for whistleblowers?

Profile photo of duncan lucas
Member

John-Its proposed legislation banning newspaper reporters from printing government “secret documents ” I thought you knew about it the NUJ certainly do and have protested strongly you usually get this in times of war . It is not enacted yet but its the use of draconian additional measures of up to 14 years to shut journalists up. Its not just defence but anything the government thinks “harms the state ” -now this reminds me of another era ? If enacted how many young people would like the same sentence as a murderer ? Civil liberties groups have condemned the Law Commission Report by the Cabinet Office for certain breaches of official Secrets legislation , the new Espionage Laws would threaten whistleblowers and reporters with the same punishment as those convicted of spying including leaking Brexit plans Katherine Gun former GCHQ said it would enable the prosecution of anyone viewing classified material. Its what is underlying this , what if I said something they wanted kept quiet ? The NUJ will respond “strongly ” to the Law Commission ,s consultation on changes to the Official Secrets Act. And you want people to speak out John ? do you know what happens to NHS employees when they “whistle blow ” ?

Profile photo of John Ward
Member

Are you referring to the Investigatory Powers Act 2016? If journalists had not been so reckless with their own snooping perhaps Parliament would not have seen the need for legislation enabling the authorities, in certain circumstances related to national security and the public interest, to inquire into the origins of their material. I don’t think this is related to whistle-blowing by employees. I agree with you on the anomaly of the maximum sentence, however; it’s not long enough. Newspapers have never been permitted to publish secret government documents until they have been declassified.

I am strongly in favour of codifying and openly declaring the law in respect of the investigatory powers of the police, intelligence and security services; they have been able to make it up as they go along for far too long. The act does have safeguards for journalists, doctors, lawyers and other sensitive professions.

Profile photo of duncan lucas
Member

You make it sound equitable John but we all know what happens when politicians enact new laws or additions to legislation , we are staring it in the face daily here when public protection laws are weakened for commerce . John I don’t really care in the personal information sense as I can get all my info from elsewhere and I know exactly whats going on behind the scenes but my point is , if the public are getting the “wool pulled over their eyes” who can cry out in their defence ? who can show up propaganda for what it is ? .Its bad enough now that most of the population are being told one thing when the actions behind the scenes reveal the opposite . The majority of the public in the US believe everything their government says ( well they did but that is changing ) because although a massive country the people are parochial at heart , its neighbours/kinfolk/ local events that interest them not International situations , I took this country to have a more inquiring , debating critical, , intelligent approach because that is the fundamentals of true democracy , when more and more information is restricted in the media and the web by censorship and blockage and even radio communications will be controlled digitally to local means instead of worldwide like I can with my old communications receiver which allowed me a means of obtaining knowledge that conflicts with the published media then , ever nearer , we are being controlled, herded, corralled with only the elites knowing the truth as is happening now that is not equitable in my eyes nor is it justice or fairness its -think what we tell you, behave like we tell you thats totalitarianism and a police state. You would be surprised at the number of “shady ” government “services ” now in action and how little control we have over our daily lives . This country bangs on about “freedom” for other countries echoing the US while at the same time imposing restrictions that Stalin/ Hitler would approve of. I am glad I have lived through an era of more freedom I just feel sorry that young people will never knows what its like.Its all done in the “best possible taste ” of course as a certain comedian once said , the film Brazil wasn’t as surreal as its made out to be, it actually put forward a political point that we are heading for in a fast car. Dont you notice the excuses for every measure being taken so that it sounds plausible ?

Profile photo of John Ward
Member

I can see your point of view, Duncan, but I don’t subscribe to the theory that information from an alternative source is bound to be more reliable.

I hope Margot James is reading all this and taking note of people’s feelings on the role of the state in protecting the population. With some justification the government believes that we are in a state of war and is acting accordingly. It is not a conventional war but its causes go back to the Second Gulf War which stirred up a lot of hostility towards the UK and we are having to deal with that.

Profile photo of duncan lucas
Member

As malcolm is always saying John the only reliable thing you can go by is not words but actions and thats how I judge this world hence the words of -its Fake news – Jim- but not as we know it (apologies to Star Trek ) that is now publicised so that we only believe the “real ” fake news .

Profile photo of John Ward
Member

You are right – a significant minority of the population implicitly know the truth to be as they perceive it.

Anyway, back to consumer engagement in corporate governance, I am pleased that the Minister hes revealed herself and that there is a desk in the sprawling BEIS for consumer affairs. I am hoping that one day when this issue has been put to bed that Margot James will come back and converse with us about the role of trading standards in consumer protection and any plans the government has to reinforce it.

Profile photo of Ian
Member
Profile photo of Simon Markall
Member

Morning, and thanks for everyone’s comments. I’ve enjoyed reading them.

To bring the conversation back a little to corporate governance. I wonder if any of you have a view on the following?

Should there be different codes and practises of corporate governance depending on what sort of service you’re offering. For instance. If you are a company providing a public good such as energy, water or rail, should you be expected to have a different, maybe stronger, corporate governance?

There is an interesting article in the Times this morning talking about how better corporate governance in energy companies could mean lower costs to customers. The argument is that with better corporate governance; investors have more confidence to invest, and the cost of borrowing money from the financial markets goes down – and those savings are passed onto consumers.

What are people’s views about expecting higher standards of corporate governance on those companies that provide a public good? How could it be done?

Profile photo of wavechange
Member

Hi Simon – First let me thank you for your input. Many of our Conversations have interesting introductions but are then cast adrift and get little or no input from Which? and those of us who contribute are left wondering if we are talking to ourselves.

My view is that all companies should be required to have high standards of corporate governance, as judged by any reasonable person. The first priority should be to get the companies that offer essential public services on track, maybe starting off with the energy sector and banks, topic we discuss repeatedly on Which? Conversation.

Profile photo of duncan lucas
Member

Nice thoughts Wavechange and how do you apply that to multi national conglomerates that don’t owe allegiance to this country ? In this age of Globalisation championing national interest is denounced as “populist ” where only multinational companies possess sovereignty and the media,s dismissive reaction to the idea that people can ALSO possess sovereignty and identities is playing into “someones ” hands . Do I need to mention Amazon /Paypal and all the rest that bring avalanches of posts to Which website because of autocratic commercialism along the lines of banks— we are too big to “fail” ( be controlled by local governments ) thereby going back to my previous post companies that are based in the USA don’t comply with UK regulations and get away with it , therefore I want US consumer laws in the UK. I would be very much surprised that after meeting with big business any real outcome will occur , at best a “talking shop ” of good ideas that propagandize to the public -of COARSE we are “doing something ” . While harsh legislation is directed against the public its a – please do as we say to multinationals.

Profile photo of Simon Markall
Member

Thanks Wavechange.

I do know that the contributors to Which? conversations are highly regarded. I don’t think a meeting goes by that I’ve been in where we don’t have a discussion about how we can work with the community to get a further understanding of an issue, or get ideas. So rest assured everything you folks write is read.

In term of energy and banks, some suggestions have focused on whether a stakeholder consultative group or customer challenge group could be set up for those organisations providing a public good. Do you feel such a group that is independent of the company, independent of their regulators, and have independent experts and organisations sitting on them providing feedback and challenge to a company’s customer engagement and decision making, might be one way to improve corporate engagement?

Profile photo of Simon Markall
Member

Duncan – You bring up a big challenge which is that often big companies span not just the UK but are multi-national. However, the UK Government are looking at this in terms of corporate governance of those companies operating in the UK.

John made an interesting point about lists earlier that i’d like to develop a little more. Could the Government be using reputation of big business to get them to deliver stronger corporate governance? If you could get an understanding of a companies corporate governance compared to its competitors, would that be helpful and help consumers made decisions about what companies to buy from?

Profile photo of malcolm r
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duncan is quite right (in my opinion) about the allegiance of multinational, or foreign-owned, companies. I think it is fanciful to think they will govern their companies with social interests as their top priority. Their primary concern is making a financial return for those who risk their money as shareholders. Without them, the company would not exist. However, this overlooks the way business generates that return. It must have a product that appeals to consumers, and it must attract and retain consumers, otherwise it will not succeed. To do this requires it to behave in a consumer-oriented way. If consumers do not like the way it behaves they can, and do , leave. This also applies to UK companies – just that they are closer to us and we might feel more able to interact with them, but I think that is also debatable,

However, with essential companies – energy and banking have been mentioned, I’d include telephony, food, housing rental – rather than leave conduct solely in the companies’ hands we need licences to lay down the code of conduct each must observe to provide the necessary protection and service level for the consumer. This needs a competent and effective regulator, and sanctions to deter poor behaviour. Monetary sanctions can be too easy to trade off against income unless they are substantial and properly directed. Rather than impose fines that simply go into a national pot, I would propose significant rebates to all customers – these are the people affected.

In essence, we have this structure now. What seems missing are regulators with the necessary will, or remit, to impose effective sanctions. I don’t see rebates as an objective, however, but as a threat to deter poor behaviour in the first place.

How do we apply such sanctions to others who are supposed to provide an essential service but fail? Government departments and their contractors – disabled assessors, prison operators, NHS, Trading Standards,local authorities, overspent defence contracts…………..No point in financial sanctions – we, the victims, pay. Job loss without compensation should be the deterrent; but how many times do we see incompetent people paid off and moved into other well-rewarded positions? Perhaps we could have a similar Convo on the conduct of public services?

Profile photo of wavechange
Member

I share Duncan’s concern about the behaviour of multi-national companies towards consumers. It’s often said that customers should vote with their feet, but that solution is only likely to be successful with small companies. Malcolm believes that it is unrealistic to think that companies will be run with an emphasis on they will govern their companies with social responsibility as a priority but I my view is that we must work towards that end. If all companies are expected to conform with appropriate standards, fair competition remains unaffected.

Profile photo of malcolm r
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What you report is not quite what I said, or perhaps better, what I tried to say. As I have stated before about commercial operations, their primary function is to operate profitably in their chosen field. That is why people invest in them, and are prepared to lend them money. Failure to do so will result in them ceasing trading.

To trade successfully means paying attention to how they offer their product and deal with a “voluntary” customer base – who can buy elsewhere if they are disenchanted. So adequate customer “fulfillment” will automatically be necessary for success.

I was making a subtle (?) distinction between the order in which things are – carts and horses. No profit, no company, however good their service. No service, no customers, no profit, no company – over-simplistic but the two go hand in hand.

Unlike the situation with some state organisations where we have no choice, cannot vote with our feet and often have to tolerate sub-standard offerings.

Profile photo of wavechange
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I am sorry if I misrepresented or misunderstood you, Malcolm. We know that shareholders invest in tobacco companies and others with questionable activities. I want to put the needs of the public ahead of the wishes of shareholders. I see no reason why requiring companies to operate responsibly need result in their failure unless they deserve to fail.

Profile photo of malcolm r
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“Sorry” not necessary wavechange 🙂 It is only a difference in emphasis. I was not considering the more controversial companies – i could include arms manufacturers for example, but unless we disband our armed forces they will need arms (pity, that). A public service is set up primarily to serve the public, a private enterprise to support its shareholders – my view. But a company that does not act responsibly deserves to suffer – it may not fail, but its profits should falter. So it is in its interests to look after those who buy from it, as well as those who fund it.

Life is not like that though. Companies do falter; perhaps it is that, on balance, they do a good job for the majority. We criticise Amazon, but it survives because most are happy with its service. I am happy with my bank – some may not be. I criticise Which? – it is not a perfect organisation in my view but I still support it, in spirit as well as with cash because, on balance, it does a decent job. (I do wish it would “engage” more with these Convos – asking questions and getting no replies gets a bit frustrating).

Profile photo of Simon Markall
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These comments are great and thanks for keeping the debate going.

Wavechange – Could I challenge a line you made about consumers being ahead of stakeholders? (“I want to put the needs of the public ahead of the wishes of shareholders.”) I understand the reasoning but wouldn’t it be best to have consumers on an equal footing in the Boardroom as shareholders?

Malcolm – your point about amazon – I think we see that a lot – and maybe it is a the heart of the debate. If people do not like how a company operates they can go somewhere else, and companies should be alive to this in ensuring they have good corporate governance.

I’m particularly interested in this comment “a company that does not act responsibly deserves to suffer – it may not fail, but its profits should falter. So it is in its interests to look after those who buy from it, as well as those who fund it.” While I don’t know about the word ‘suffer’, I get your meaning, but how do we get the Chair of a Board, and their Directors to look after the interest of the consumer?

I’m going to have a think overnight (Valentines Day has passed me by) – but tomorrow I wonder if we could discuss what the role of a Director on a Board should be?

For now, I think you all deserve a cup of tea.

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Simon said If you could get an understanding of a companies corporate governance compared to its competitors, would that be helpful and help consumers made decisions about what companies to buy from?

Different brand names appearing on appliances like Electrolux, AEG, Tricity Bendix, Zanussi are an example of deception to consumers when they are all the same company.

If we are to have real competition and choice, parent company brand names need to be on products so consumers know exactly what they are buying and who from.

Searching for a product on the internet can highlight the same company trading under different names often with mail-only addresses and no real contact details.

Consumers need to know who they are dealing with and companies large or small need to be honest about who they are and come out of hiding.

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A couple of unrelated thoughts on corporate governance and behaviour:

(a) For most major companies the chief shareholders are pension funds, insurance companies and other financial institutions who have a fiduciary duty to maximise the yields on behalf of their members or pensioners or policy holders. For generations this has somewhat inhibited them from being anything other than passive in their relationship with the companies they have invested in except that they have regular dialogues with the chairman and the chief executive about corporate strategy and profit forecasts; if they have had anything to say on corporate responsibility concerns it has been strictly confidential. In recent years, however, many of these, often mutual or provident, organisations have spoken up at AGM’s and behind the scenes about executive remuneration, trading ethics, and customer engagement and the worm is, at last, gradually beginning to turn. The CBI has also helped a little bit with its recent concerns over the evaporation of public trust in UK companies and a desire to restore their integrity and good faith.

(b) In discussing international conglomerates we should not overlook that the UK itself has a fair number of such companies, not usually in the consumer’s immediate vision but nevertheless very influential. Are they all as good as gold? Rolls-Royce, British Aerospace [BAe], and GlaxoSmithKline [and others] have had their ‘little local difficulties’ with financial irregularities in winning contracts overseas, but they are at the pinnacle of British business and their misdemeanours are costing their UK investors dear and that impacts on share prices and pension yields and ultimately on the household budget. Some of the world’s top banks, drinks manufacturers, insurance companies, drugs and chemical manufacturers, oil & gas producers, retailers, telecom networks, transport operators, tobacco companies, and advertising agencies, are UK companies with global reach and they are supporting millions of households throughout the country with jobs and pensions. If we persist in casting big business in the role of the enemy I doubt we shall make much progress in reforming these corporate giants and holding onto them as staples of the UK economy.

I endorse Alfa’s point about corporate branding. It is essential that branding differentiation according to market segmentation is not taken to absurd levels that border on the dishonest. Rehashing heritage brand names in order to inject false value into a poor product is another example of why the public has lost trust in commerce and industry.

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Simon wrote: “Wavechange – Could I challenge a line you made about consumers being ahead of stakeholders? (“I want to put the needs of the public ahead of the wishes of shareholders.”) I understand the reasoning but wouldn’t it be best to have consumers on an equal footing in the Boardroom as shareholders?”

I am open to suggestions and trying different approaches, but am not convinced that this approach would achieve what needs to be done. Having consumers represented in the boardroom seems like a token gesture. I had hight hopes when we first heard of corporate social responsibility but as John Ward has implied, it has not achieved what we might have hoped for.

A few hours spent looking through the pages of Which? Conversation will identify recurring problems typical of those faced by many consumers. My approach would be to identify genuine problems and take prompt action – not let them run for years or even decades. Many consumer issues could be resolved if Trading Standards was more effective, both at a local and national level. I have found my local Citizens Advice helpful on various issues but when my cases have been referred to Trading Standards they have been no help whatsoever. Once I was told that I have a valid case against a company, supported by evidence, but TS would not take it further because there had been no other recent reports. Like others, I have found that Amazon has refused to take action against Marketplace traders selling via the Amazon website, even if there is a safety issue. Once again, we need to be able to call on Trading Standards to deal with valid complaints.

I don’t discount the possibility that having consumer representation in the boardroom would be good for helping improving trust but my highest priority is to deal with companies that are clearly breaking the law. The Consumer Rights Act works well in some respects but customer who approaches a retailer with a problem over goods that are beyond the guarantee period is likely to be referred to the manufacturer or simply turned away without investigation to discover whether they may have a valid claim.

How should we deal with companies that have let down large numbers of consumers? The VW Group and Whirlpool come to mind. Should they be allowed to carry on trading and to sort out the problems at their own convenience?

Until I took early retirement I worked in higher education. I cannot speak for other universities or even other departments but we took a very pro-active attitude to dealing with students’ problems. If there was any uncertainty it was our policy to act for the benefit of a student. This is in stark contrast to the way that I have been treated by several companies and others have had much worse treatment than me.

The first responsibility of the Director on a board should be to ensure that their company complies with existing legislation and acts in a professional way in dealing with customers’ problems.

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While Whirlpool is part of this overall programme being a multinational company for some “strange reason ” I have just received my first email from Which proving its not the communications service by email thats at fault but a which server fault in that I + Alfa don’t receive emails updating us of posts , I take it Which is working on this Patrick ? In any case it was about product safety , in which I agree and was taken to a HMG sign in website where I singed and got a click to confirm email which I clicked –and it worked when I reached the web page as some US ones I sign don’t and are suspiciously blanked off anyway I take it this subject will be talked about as well as it is part of the overall investigation (I assume ) of this Convo,s purpose. It has certainly generated a very large public response from UK citizens helping up Which,s world level visit rating where Which is held in high regard even in the USA .

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Hi Duncan, yes we’re still looking into this. We think it’s related to an update we rolled out on Friday. I’ve managed to replicate what you’re seeing, so I know it’s not just you and Alfa… it’s me too! I’ll keep you updated on how we’re getting on with fixing this over on The Lobby, just so we don’t stray off-topic here.

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Thanks for replying Lauren and for being honest which is all I need in life to keep me happy , and you too Lauren ! so its more of a general thing than I thought , I will keep a check on The Lobby for updates , I don’t post there much because I am absolutely useless at small talk – struck dumb , although I am good at getting people together at parties when there is an atmosphere or much reserve.

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🙂 a valentines’ day thought duncan? 🙂 (oooh – I❤️Which? to avoid confusion!) I went to the site on energy providers’ responses to Which?’s campaign and a link kept taking me to the FT site – “please subscribe”.

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Credit where credit is due malcolm , it might not seem so but I am even handed and congratulations to Which on this St. Valentine,s Day as this is one of the few websites that I have not “stormed off ” in disgust or been ejected from for speaking the truth .I am held here by the quality of replies and the high standard of intelligence from the regulars and just the “want ” to post here , no marriage proposals though (yet ) . Those links in other websites even technical ones get changed over time to third party advertisers that benefit the website noticed it again and again , so I always note the URL and use that instead of a re-direct to an advertiser its part of the Web’s way of life.

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Hi Malcolm, please let me know which link is doing so as this shouldn’t be happening. Thank you

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@ldeitz, It happened when I went to the Fair Energy Prices update, in the text before the list of responders/non-responders. A link (can’t recall the name) took me to an FT site. the link is no longer there.

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Hmmm, very odd. Possibly a small mistake, please to see it’s no longer there.

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This Government is committed to making Britain one of the best places in the world to work, invest and do business.

I have no problem if a foreign company starts up a business in this country, it doesn’t work out so they close down or sell up.

What I do have a big problem with is foreign companies buying up British companies.

Foreign companies should not just be able to buy up our companies, shut down our manufacturing or move it out of the UK.

Too often it is for asset stripping where a few people get rich, workers lose their jobs, factories are shut down, products are discontinued, and areas of the country go into decline as there is no work to sustain them. There is something inherently wrong with a system that allows companies to be bought on borrowed money when the new owners have no intention of maintaining those businesses.

Much of our infrastructure is now in the hands of foreigners – energy, telecoms, travel. We are never going to get fair pricing when our infrastructure is not in our hands. Why is this allowed to continue?

The government is struggling to find the money it needs to maintain services in the UK, but how much is lost in taxes as companies hide abroad?

The government needs to define ‘Investment’ and start protecting our industries and our country for the future, not for a ‘quick buck’ now.

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I completely agree, Alfa. That sums it up perfectly.

I was thinking along these lines only this morning while I was struggling to open a packet of knives bought recently. The name on the knives was Kitchen Devils which I thought was a long-established UK company that manufactured in the UK; maybe not, but they have certainly been around a long time. However, the packaging revealed that Kitchen Devils was now part of Fiskars which is a Finnish company that has bought up lots of UK companies but still sells the products under their original brand identities. The problem with that is that they have not only substituted foreign ownership and profit-taking for UK firms [and UK tax on those profits] but are able to sell inferior products using the reputation of the British heritage and brand qualities, and they also project these into export markets thus devaluing the UK covenant. Whether Fiskars is doing this on a wide scale I know not, but a few years ago I had a problem with a Wilkinson Sword garden spade which bent when I was doing some heavy digging. It turned out that the spade was a Fiskars product and I sent it back under the 10-year guarantee in return for a voucher. I would bet that no Wilkinson Sword product would fail in that way; they had a good reputation for reliable garden tools and I assumed I could buy with confidence. Apparently not.

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I have 2 small Kitchen Devils knives, made of surgical steel and Made in Sheffield proudly stamped on them. I have had them a very long time, at least 30 years, they have been sharpened many times, starting to get a curved edge and I have looked high and low for similar knives but haven’t been able to find any.

I hadn’t realised they were now part of Fiskars. This is an excellent example of the decline of a British product as is Wilkinson Sword where the name should not be allowed to be used if it is not produced in this country by a British Company.

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I agree with the points made by Alfa and John. I am particularly concerned by the extent to which our energy industry is now in the hands of other countries. We cannot continue to allow business to be run primarily to suit the wishes of companies and their shareholders and must prioritise the needs of citizens. Hopefully our withdrawal from the EU will make this easier.

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A recent foreign takeover is Streetlife by US Nextdoor. You have to ask why Nextdoor want Streetlife? It is certainly not for the good of British neighbourhoods.

An article entitled ‘Streetlife users in Nextdoor privacy row’ can be read here:
http://www.bbc.co.uk/news/technology-38920906

Any online forum that discloses real names and addresses is wrong.

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Good morning! While this has opened up an interesting discussion it feels like we’re straying off-topic, can I suggest moving this over to another convo? Maybe this one would be suitable: https://conversation.which.co.uk/home-energy/theresa-may-prime-minister-consumer-strategy/

We’d love to gather as many ideas as possible on this convo on how you think consumer voices can be better heard and represented in company boardrooms, and how you think directors are doing at representing customer views.

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Before I could support this initiative, I would like to see some evidence that it might be useful. Has it been tried in the UK or elsewhere? I am concern that having consumer representation in boardrooms might be a token gesture.

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Sorry Lauren, but I see them all connected to the bigger picture and getting consumer voices heard in company boardrooms just chipping away at the edges as usual.

How much notice do Which? directors take of digs at their pay packets?

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I am sorry to repeat myself (26th time?) but this view of companies does keep appearing. “We cannot continue to allow business to be run primarily to suit the wishes of companies and their shareholders”. The reason a commercial company exists is to make a profit and provide a return for its shareholders – the owners – and to repay money that has been loaned to it by confident lenders. If it cannot do this, the business will eventually fail. Remember many of us are “shareholders” directly, or indirectly, and the dividends from these companies fund out pensions.

However, unless a company has a product that potential customers want, and provides them with an acceptable service, those customers may, or will, take their business elsewhere, so the company will falter or fail. therefore providing the needs of its customers will be a key feature of a company’s strategy.

We need to apply a similar critique to public services, where we generally have a monopoly situation – no possibility of voting with our feet (well, only once in 5 years between two equally unappealing options).

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You missed a bit, Malcolm. I said that we must prioritise the needs of our citizens. Companies would still exist and make profits if they were required to behave in a more responsible way towards their customers. I expect our government to set the standards and the companies to comply. Fair competition can still occur.

If consumers are to be represented in the boardroom they should obviously not be shareholders and be able to declare that have no financial or other interest in the company or others in that sector.

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Which is why, earlier, I suggested that we look at the regulations that companies must abide by, and police those. I simply do not see the practicality of finding effective consumer representatives who can contribute to the huge number of companies. Where do we find suitable individuals, how do we train them and, as they will be in a minority of one, how will they be effective?

We could start, perhaps, with the major “essential service” companies and put a member from the regulatory body on their board, attending every board meeting, to ensure propriety. But how do you deal with foreign enterprises? I still come back to policing an improved regulatory system that lays down the rules and penalises those who stray. Make that routinely effective – which is rather like Trading Standards role in protecting consumers – were it only properly funded.

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That’s fine, alfa. Maybe it is all part of the bigger picture, but I just felt that it was straying a bit which could be off-putting to newcomers to the convo. If you feel there’s a way that it can link through to the discussion in the main, then I’m happy for this to continue.

In terms of your question of Which? – we have many channels by which our directors tune into feedback – channels could be at our AGM, feedback shared here on Which? Convo, the Which? member forum or even via Member Services, and issues may also be raised by our Council. In terms of governance, the charity is managed by our Council, and all of whom are themselves Ordinary Members. The majority are elected by our membership.

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Not sure I agree with your rather gloomy capitalistic view of companies, Malcolm. While it’s true they have to make profits for their shareholders, they also – in a civilised society – have to abide by rules – rules laid down by society because, if for no other reason, we’ve seen what happens when companies are entirely re-regulated.

There’s a precedent for involving the consumer in governance. In the 1986 Act all schools were required to have ‘parent representatives’ on the Governors, but not a majority. By and large it seems to work, and there’s no shortage of those prepared to undertake the roles, although they can and do become demanding.

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@ldeitz, I am sorry if I present a somewhat jaded view of your response to alpha’s comment. Rarely are questions answered in these Convos – particularly those addressed to Which? The AGM provided no time to question and debate Which?’s policy or remuneration – although there was time for a defensive statement on the latter. The Which? member forum simply does not function extensively – the most recent contributions are 7 and 8 days ago, followed by the next one 23 days old. I have written to the council and been fobbed off with a generalised response, and this is the normal fate of email enquiries I have directed to Which? Whilst the council may be voted for, I do not see a diverse enough range of members and expertise. Out of 14 members 4 seem to be lawyers, 6 directors by background, and only one engineer. Where are people knowledgeable in science, manufacturing, economy, consumer protection………….

However, it is not all bad. I have been exchanging emails on a particular topic that was initially replied to, but not answered – if you see what I mean. I was persistent and through my helpful contact have a specific response that I hope represents good news.

In support of alfa, Which? could set the standard better than it does.

Not popular comments, I am sure.

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I was simply trying to give my view of the basics, Ian, not the frills. I have acknowledged the “rules” by proposing better policing and regulation, including access to those organisations who can act by people with genuine concerns, whether consumers, employees or others.

I had considered the school governor parallel but, of course, they are physically located near their school and able to attend meetings. And they have day to day experience of the school. Whilst all of us regularly deal with specific companies like supermarkets, energy, banks and so on we, as individuals, do not in the main do regular business with the vast number of other traders, like Currys, AO, Amazon, Everest, Lakeland, Shell, Specsavers………. How to apply a consumer’s voice to these that is effective? If they are there simply to ensure the company acts with integrity then official rules and company law will be the governing regime, it seems to me, like the law judges other activities. Highlighting inappropriate activity to purposeful regulators should, maybe, be one thing we seek to do, and then have remedial action taken in public.

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Hi @malcolm-r, I’m sorry to hear this. We try to reply as much as we can and I think Simon is doing a great job demonstrating a good level of engagement here. I hope you can appreciate that there are some replies that can take us time to find out all the relevant information for you before we post – we feel it’s important that the reply you get is thorough and completely accurate. Where possible we’d prefer the subject experts to reply to questions on convo, but time constraints often means that this isn’t always possible to do so within a timely manner and so myself, Mel or Patrick try to reply to speed up response times. But, I’ll admit that it’s not perfect and we’re exploring ways to improve this. As you know there are some questions you’ve asked of us where there are limitations to what we can say in response. I don’t feel that we should go quiet on these issues though and so we do and will reply where we can.

I’ve let the organisers of the AGM know that you didn’t feel there was enough time for you to fully raise your questions at the event, as this is certainly the forum for you to do so. It is our Council that’s responsible for setting strategy and policy, and has overall oversight of the organisation.

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@ldeitz, thanks Lauren. Simon does a great job and so do you. but two examples that seem
to merit replies. Which?’s views on abolishing fixed-price fixed-term energy deals that are subsidised by standard variable tariff customers. And what the fix is that Whirlpool are applying to Indesit tumble driers, why it was necessary, and whether the faulty driers met the safety standards in the first place.

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Ok, noted @malcolm-r. Let me press for replies on those questions. I know that an answer on at least one of those is coming shortly… 🙂

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@ldeitz Thanks 👍🏽

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Thanks for the shout out @malcolm-r

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Lauren said In terms of your question of Which? – we have many channels by which our directors tune into feedback – channels could be at our AGM, feedback shared here on Which? Convo, the Which? member forum or even via Member Services

Ditto Malcolm some Which? folks do a great job conversing with us.

But can we say the same for Which? executives…
Richard LLoyd wrote 42 convos but contributed to none of them. He ignored my request to come and discuss nuisance calls with us.
Peter Vicary-Smith has written 43 convos and made just 1 comment on them.

The examples given by Lauren above are not direct involvement with consumers. Engagement with consumers needs to be a 2-way street. If a consumer driven company executives like Which? do not converse with consumers through their own conversation website, I don’t see much hope in getting big company boards to listen to consumers.

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Hi @malcolmr , I can’t respond on the Whirlpool point but can shed some light on what we think about fixed term deals in the energy market. Generally fixed term deals are good to get people switching in a market and should theoretically bring prices down as providers compete for customers. The problem arises when theory doesn’t match reality, as the CMA’s market investigation found with switching levels and consumer engagement not being good enough in the energy market. This has led to the majority of people ending up stuck on some of the most expensive SVTs, with only those few active switchers gaining from these cheaper deals. It’s why we agree that the energy market isn’t functioning properly or working for consumers as it should.

You might know that our Fair Energy Prices campaign has been calling on energy suppliers to publish plans to engage their customers and help them find better (and hopefully cheaper) deals to address the exact issue that you’re talking about. By becoming active in the market, they can hopefully begin to benefit from cheaper deals too. If we think the best thing right now is to get rid of fixed term deals altogether, then the real questions are do we want a competitive energy market or do we ever think the energy market can be truly competitive? This will of course have a bearing on energy prices and what deals are available in the market for everyone.

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@neena-bhati, Thanks Neena. First, as you say, fixed price deals have not attracted the majority of customers to switch.

My concern, that you do not include, was that it appears many of these fixed price deals are cheaper because they are being subsidised by those not moving from standard variable tariffs – therefore these svts are higher-priced than they would otherwise be. If fixed price deals were universally abolished, or had to be shown to be profitable in their own right, then for the same overall profitability, energy companies could reduce the cost of standard variable tariffs. There would then be no need to shop around for artificially cheap tariffs; we’d just look at SVTs and those who choose not to switch would not lose out to the great extent they currently do.

There would, of course, still be a real competitive market between different suppliers, but maybe prices would be closer than they are now – which is what many would like.

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@neena-bhati, could Which? comment please?

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@aneill, I would like to know what Which? think about my comment on svts and fixed deals, above, and whether you would support this as one of the ways way forward.

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@ldeitz, Hello Lauren. I’m reminded in a roundabout way by Patrick Yaylors post today that I don’t remember you getting a reply to my questions on Whirlpool and energy tariffs. Did you ever get any response?

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Morning

Thanks for your continued engagement on this conversation. Hopefully you’re finding it interesting and informative.

So far we’ve discussed the broad role of a business and how it might be made to better understand consumers and take account of their priorities. I’m wondering now if we could discuss the role of the boards and specifically Directors in boards.

Under section 172 of the Companies Act, Directors have specific roles and responsibilities including a responsibility to consumers. How could Directors better engage with consumers to demonstrate that they are filling that duty? How do you want to be engaged with to ensure you’re satisfied that the Directors of the companies you are dealing with are fulfilling their Section 172 duties? On a board should there be a specific Director that is responsible for ensuring the consumer is on the same level as shareholders? What is the role of the Chair of the board in getting the consumer voice heard?

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Good morning Simon. Can you give us any example of companies that have invited consumers’ representatives into the boardroom and how successful this approach has been?

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Having just read the Corporate Governance Reform Green Paper, several thoughts come to mind…

Make names and addresses and email addresses for board members easily accessible. I can’t see any other way of directors engaging with consumers.

Stop directors diluting companies by taking huge bonuses that are out of all proportion to company success. If workers at the bottom can’t get a pay rise why should directors. Ensure remuneration is proportionate across a company.

Keep British companies under the control of the UK. Foreign investment can be welcome but not able to take a majority stake in a business.

Bring back real competition. If a brand is taken over, then it should cease to be used unless part of the parent company name. e.g. Electrolux AEG, Fiskars Kitchen Devils.

And a big task, protect our manufacturing and give them the will to keep going.

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Thanks Wavechange.

I think many companies would say they think about their customers all the time but the real challenge the Green Paper is trying to get to the bottom of is how do companies start demonstrating that their engagement and subsequent decision making is shaped by consumers.

Organisations like John Lewis seem to reflect their consumer values quite well, while getting a balance between the business need and consumer priorities.

Other organisations such as the digital bank Fidor Bank, established in 2009, look to develop an online community where financial advice can be shared and ideas developed with an online community of consumers and the bank. It also rewards you as a community member for your interaction through increased bonuses and payments.

In many ways examples of companies that listen to their customers at the Boardroom level are the ones that often do well across different measures including customer service.

I’m wondering if for all companies though, should there be a requirement that consumer views are given the same weight as stakeholder views? If so, does a Director sitting on the board, who is solely responsible for consumers one way to ensure that? Or should there only be a requirement from certain companies like rail, energy, water etc who deliver a public good?

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Company forums or online communities are a good idea if board members really commit to taking part on a regular basis. They could then ask their own questions or answer consumer questions.

The Which? powers-that-be do not have a very good track record of following up on their convos.

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Simon, many companies engage routinely with customers through market research.
You mention John Lewis, but they have become, in many areas, overpriced and sell a lot of junk. Is that what we want? Well, in my view that is up to JLP to decide how they trade and the trading performance will help determine their future. M&S have had problems with clothing and will no doubt anxiously look at their market to see where they are not meeting their customer-sector’s needs. I am not clear how sitting another individual on the board is going to provide some magic solution.

The companies I worked for – large and small – were constantly looking at their market, their competition, at innovation, seeing how they could increase their turnover and, most significantly, this revolved around understanding their customers and their needs.

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Thanks for your reply, Simon.

My only experience of how this might work comes from when I was a lecturer in a large department. We invited a student representative from our student-staff committee to sit in on our departmental board meetings, which were attended by all our teaching and research staff. Some of us tried to get student reps to engage but they rarely did. In contrast the same students often made very useful contributions in our student-staff committee where the number of student reps usually exceeded the number of staff present. It might help to have a pre-meeting between a couple of board members and a group of consumers’s reps and then invite one of the reps to attend the actual board meeting. I would also suggest that discussion of consumer matters is recorded on video and made publicly available online for the sake of transparency.

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Further to Simons plug in “The lobby” a Wiki summary of directors duties is here:https://en.wikipedia.org/wiki/Directors'_duties
and here https://en.wikipedia.org/wiki/Directors%27_duties_in_the_United_Kingdom

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If we want a consumers’ voice in the boardroom (of every major company?) who do we think is qualified to present a consensus of consumer views? An individual – how are they instructed by consumers and how do they avoid projecting a personal view? An organisation like Which? – that should also seek a majority consumer view? There are not enough of these people (although as a totally fair, balanced, objective and life-experienced individual I will take on this job for an agreed fee). In practice I think that we can only investigate “exceptions” – when things do not look right. Those inside or connected with an organisation can be given the means to do that, and then a suitable independent organisation can take it on.

We should not only focus on business; there are misdemeanours afflicting public organisations.