Paul’s Wall – Mar 2012
I recently had a very interesting conversation with staff from the Department of communities and local government about transparency and value for money within our business.
I think in terms of governance we are as transparent as we could be. I do a video on You Tube to tell people what happened at our most recent board meetings. All non-commercially sensitive board papers are published on our web site as are all agendas and minutes.
However in terms of value for money and transparency things are not as simple as with governance. On first considering the subject it seems pretty clear what transparency is and how to demonstrate it. On reflection however it isnâ€™t as obvious as one might think. I guess most people would agree that complete openness with all information freely available would be the starting point. Hence the current move for some organisations to publish all spending over ÂŁ500.
Great, so now you can see all of the money spent in a month by companies like ours with a turnover of ÂŁ50m per annum. How many transactions do you think that would be? Thousands is the answer. So you can now read through a list of thousands of transactions. You would have to be a forensic accountant to work out what these transactions actually meant. Also if the organisation wanted to hide something, where better than amongst thousands of other figures?
Then you have the question of commercial sensitivity. We operate as a business. We tender for work and we get tenders for work/services. If we made the results of these bids freely available out competitors and suppliers could easily work out how to beat us or win work with us. This would be no good for the business or its own customers who wouldnâ€™t get value for money from our tender process.
Having pondered the above I thought about where this leaves us. We want to be as transparent as possible but commercial sensitive information canâ€™t be freely given and posting all transactions gives the appearance of transparency but in fact obscures what we want to achieve. I then asked myself the following question; what would I want to be able to see and why?
Firstly I would want to assure myself that the staff and board werenâ€™t feathering their own nests with the companyâ€™s money. Secondly I would want to ensure that the company wasnâ€™t extravagant when undertaking activities. Thirdly I asked myself what sort of expenditure could cause embarrassment if people could clearly see it.
Some obvious answers to the three questions above came to mind. The first one would be the chief executiveâ€™s, the other company directorâ€™s and the board membersâ€™ expenses. If the senior officers werenâ€™t extravagant with their expenses it is unlikely anyone else within the company would be allowed to be. Secondly the company hospitality register would be of interest as this should show if staff members gave or received lavish hospitality. Other spending heads that came to mind would be spending on items that are not core to the business for example PR or advertising. These are essential for most businesses but I think most people could judge if the amounts were at a reasonable level.
I realise that my thoughts alone would not be enough to agree the level of value for money transparency. Therefore we will be starting a consultation with the Adactus500 very soon on what items tenants would want to see us publish. Watch this space for an update.
See you soon – Paul