Plenary 2 What will responsible business look like in 2025? In this feature l ethical business l cuts to services l compliance and enforcement CONFERENCE 2017 Who’s responsible now? What does responsible business look like – and can we get there without an effective enforcement system? Louise Parfitt reports ‘P in the context of wanting and allowing business to be responsible.’ This view – presented by Steve Tombs, professor of criminology at the Open University during the second plenary at CTSI Conference – is already becoming apparent, with the use of non-compliant products a probable factor in the recent Grenfell Tower re. Subsequent testing of cladding products used on high-rise buildings across the UK have all failed, suggesting that this use of non-compliant products is not an isolated incident. Tombs’ sobering comments follow his recent research on health and safety, which revealed some appalling results. ‘The most recent data for 2015/16 indicates that there were 18,000 inspectoral visits by health and safety inspectors in this country, who are responsible for regulating and inspecting 900,000 workplaces,’ said Tombs. ‘So that means the average workplace can expect to see a health and safety inspector once every 50 years.’ He highlighted the case of Liverpool, where there are now no specialist health and safety of cers in a city with 40,000 businesses. Judicial review proceedings were also instigated after Liverpool Council slashed its trading standards service from 19 to four. Tombs added: ‘One of cer told me: “We’re at the point where work itself is being jeopardised, and this is starting to become a danger to public health”.’ While shocking, such ndings came as no surprise to the majority of Conference delegates, whose profession has suffered similar unsustainable cuts since 2010. Tombs believes we should be asking what businesses require to be responsible. In his view, they need laws, regulation and enforcement – all three things together. ‘Responsible business needs law and enforcement for a level playing eld and what constitutes compliance. But we’ve had about 25 years of ceaseless reviews of regulation. Most perniciously, regulation – and enforcement of law as it affects business – has come to be seen as bureaucratic, as getting in the way. ‘If I could, I would ban the phrase ‘red tape’ because it’s an awful, pernicious and offensive term, for what actually is law designed to protect citizens, workers, communities, and the natural environment.’ Irresponsible business One audience member asked what irresponsible business will look like in 2025. Lewis Shand Smith, chief executive of Ombudsman Services, said there will always be those who are irresponsible, so we Lewis Shand Smith fears assured self- regulation will be a ‘tick-box exercise’ ublic health and protection is being eroded; we’re at a point where there’s no esh left to cut. This is starting to get dangerous and is a danger to public health. At this point, we don’t have a credible enforcement system, and I think that’s a problem [The Grenfell Tower] tragedy and the inquiries into it will change your perspective on what a responsible business actually looks like Declan Curry Steve Tombs would ban the ‘pernicious and offensive term’ red tape need to look at how we deal with them. He pointed to two things that could help – good publicity for the work trading standards does to raise awareness of enforcement, and highlighting responsible companies, to help educate the public that an ethical business is going to do a good job. Like Tombs, Shand Smith also warned of the impact of recent cuts: ‘We have really good consumer protection legislation in the UK – but if we’ve not got the people to enforce it, what’s the point? One of the things that occurs to me is something said by your sponsors – that over 20-odd years as a business they’ve been able to go to trading standards and ask for advice, but that is dying as well.’ In 2016, Ombudsman Services carried out 76,500 investigations, most of which were upheld in favour of the consumer. But last year in the UK, around 75 million complaints were not made when something had gone wrong because people didn’t trust businesses enough to make the complaint. Yet there is a push from government towards assured self-regulation, where external agencies offer some supervision, but business takes responsibility to regulate itself. Shand Smith questioned whether this is just a tick-box exercise, rather than something that will actually challenge people to think about the way they do business. Ethically based business – is it possible? According to recent studies, if a company’s values are right they have a different approach to regulation, because people do what they have to do because they want to. Shand Smith said he hoped that, by 2025, business will be driven by people who do the right thing for their customers – not because they have to, but because they want to. ‘It should be in the DNA of your business [to treat people fairly]. We are seeing businesses now that are basing themselves on values, and I think that’s the way we’ll turn around this whole issue of trust,’ he said. ‘At the end of that, there’ll be a big change for the role of the auditor. The question for the ombudsman is what we do about the people who don’t complain. [Can we] add the data we have to the data others have, and use it to bring about much better customer service to help encourage businesses to treat their customers fairly?’ Declan Curry – award-winning journalist and plenary facilitator – asked the speakers if they had a genuine belief in businesses being ethical, or if was just wishful thinking. Julie Dawson, director of policy and regulatory affairs at digital identity company Yoti, said that she has seen companies embracing ethical models. Yoti helps people prove who they are – in face-to-face and online situations – and responsibility plays a key role in identity and age veri cation. Dawson said 150 businesses have already worked with Yoti through an ethics and transparency process, and there are 1,000 more going through it. Octopus Energy began in April 2015 as an alternative to traditional energy companies, and has based its model on putting the consumer rst. It has grown to serve 100,000 customers and has only received one customer complaint. Co-founder Greg Jackson puts this down to technology and transparency. His approach is to empower customers through the use of technology – by having the best systems in place so customers can get information easily, see what they are paying for at a glance, and speak to a friendly person quickly if something isn’t as they think it should be. Many rms are now embracing technology. Jackson pointed to the popularity of the smartphone giving rise to platform-based businesses such as Uber. He questioned whether such a development is irresponsible – Uber falling short of traditional regulations, for example – or responsible – Uber bringing a whole new service that allows young people all over the world to get home. ‘Technology drives pace, and pace enables businesses to move far faster than regulators and governments are used to,’ he explained. ‘The great opportunity and challenge for regulators, government and citizens is realising that democracy is sovereign over business.’ Jackson said tech-driven companies create a lot of data that – if accessible – will reassure us that businesses are doing the right thing. Octopus invited the government regulator to look at its data, and Jackson believes this level of transparency prompts not just individual companies to behave well, but whole industries. ‘Transparency is what keeps us safe,’ says Jackson. ‘I think if businesses grasp that, then regulators will see really responsible businesses in 2025.’ Principles over profit An audience member referred to Jeremy Corbyn’s rise in popularity among young people; whether you agree with him or not, they added, he has based his life on principles that have never changed – which is attractive to the younger generation. Curry suggested that perhaps younger people – the future enterprise leaders – will be more in tune with the social consequences of business, so less enforcement will be needed. Tombs believes it depends on the type of business. Ones that deal with consumers are more likely to be responsible, but many are involved in business-to- business transactions. ‘I think businesses – certainly in the area of food safety – are much more likely to be responsible where they deal with their own consumers. That’s not the case in many areas of health and safety work, and that’s not the case in pollution control, where – as citizens – we’re unaware if we’re being legally or illegally exposed to various pollutants.’ Dawson countered Tombs argument by saying research has shown that working for a company with a purpose is a real attraction for the younger generation – and an incentive to stay in a job. ‘Whether they have the skill set – and whether they intrinsically know how to bring in enforcement or design elements to make business accountable – is something else. I do think you need the motivation and you need those structures in place – but it’s really important when trying to attract and retain staff.’ More than half of Jackson’s team joined Octopus because of the company’s ethical position and Jackson said his staff help hold him – and themselves – to account. ‘It’s really interesting that the real pressure is not from consumers, but from the people that work in the business. Rather than being the “snow ake” generation, millennials are the ones who are not afraid to hold our feet to the re.’ Of course, there have always been businesses – such as The Body Shop – whose whole model is built on ethics. Jackson believes enforcing ethics and really pressing for transparency are the areas in which regulation are needed, because it makes it harder for people to hide from the consequences of their actions as consumers. This is far more important than just relying on people to do the right thing. There are still a few years to go until 2025, and – before then – the small matter of Brexit, which could have a huge impact on the business landscape. Much to the amusement of those gathered, Shand Smith quipped: ‘Will there be any of this left six years after Brexit?’ To share this page, You might also like Bravery amid a terrible tragedy Declan Curry introduced the plenary with a timely reminder about the tragic fire at Grenfell Tower, and the questions it raises about the quality of construction, materials, maintenance, the rigour of inspection, and the attention paid to advance warnings from residents about problems. ‘I think the tragedy and the inquiries into it will challenge your thinking, and will change your perspective on what a responsible business actually looks like,’ he said. ‘But amid that terrible tragedy, we saw immense bravery and remarkable acts of huge generosity. We saw similar acts after the Manchester bombing, and after the terrorist incidents in London. ‘These instinctive, spontaneous responses show that our society remains woven together by threads of compassion and solidarity – and that should give us tremendous strength and resilience as we face the challenges of the future.’ Transparency is what keeps us safe. If businesses grasp that, then regulators will see really responsible businesses in 2025 Greg Jackson Greg Jackson says democracy is sovereign over business Julie Dawson believes younger people are attracted to working for a company that has a purpose Will there be any of this left six years after Brexit? Lewis Shand Smith Credits Credits: Louise Par tt is a writer for click on in the toolbar Raising standards – July 2016 TS Today. Images: Sam Atkins Panel members Facilitator Declan Curry, journalist, speaker and conference chair Panellists Julie Dawson – director of policy and regulatory affairs at Yoti Steve Tombs – professor of criminology at the Open University Greg Jackson – chief executive, Octopus Energy Lewis Shand Smith – chief executive and chief ombudsman, Ombudsman Services