Trust: the tangible unknown

Trust me...?

Trust and integrity have come to the forefront of debate in the last few weeks.  What is common to the MP expenses scandal, the Iranian presidential election and the elections to the European Parliament is that trust, or the lack thereof, is responsible for the difficulties.

It is clear that for political systems and democracy to function, trust needs to be present.  The difficulty with this is that trust is inherently intangible, something emotional and something that cannot easily be measured.

The oil that powers the engine
It is trust that allows governments to govern; politicians to lead; and businesses the right to function in the market.

And whilst there has been a lot of focus on the new regulatory frameworks needed to curtail banking excesses, new rules for MPs expense claims and codes of conduct for those in public office, one truth remains – abiding by the rules is just not enough.  Citizens, consumers, customers expect more and demand more.

Last week, I was talking to a chief executive who said that the real test of leadership is whether people in your organisation do what they should be doing when nobody is watching.  This relies on trust and belief.  It relies on trust between the CEO and his/her team and on a shared belief that the strategy is right and worth pursuing.

The futility of sticking to the rules
On the other hand, it is clear that many MPs require a more public school disciplinarian regime if they are to stick to the rules.  Ironic considering that it is the law-makers themselves that expect and demand citizens to abide by laws without constant supervision.

From the current political malaise, there are lessons for organisations of all types and all sizes.

Good business isn’t just about abiding by the rules whether that is in sustainability, employee relations or financial probity – it is much more than that.  It is about doing business in a way that is authentic.  In a way that is congruent.  In a way which ‘interprets’ public and market sentiment as much as it ‘sticks’ to the rules that determine what it must do.

Building an authentic reputation
The temptation to turn to communications and reputation management programmes mustn’t be driven by the need to don a sticking plaster.  Instead, it should be driven by a desire to build a reputation that is authentic and reflects what an organisation stands for.

By building an authentic reputation many benefits flow: more goodwill amongst your customers, greater brand loyalty from consumers, more engaged and motivated employees, a more respected voice with policy-makers and regulators, and a brand that will stand the test of time and growing media scrutiny.

The truth is that, unless organisations do this, they will be found out.  And if that happens, there is little point in claiming you ‘stuck’ to the rules.

As, in today’s febrile media environment, rules don’t count for much.

EU elections – Why should businesses care?

Personalisation, local community involvement, grass roots politics…as an antithesis to today’s globalised world, what we seem to want from our brands, political representatives, even the media, is a sense of home, involvement and belonging.

It is no wonder then that political campaigns leading up to the European Parliamentary elections which have just taken place, focussed, by and large, on national issues – and not Europe. Eurosceptic and pro-European politicians alike have been using the European Union (EU) to manipulate public opinion in their own favour. Depending on the political stripes, the EU has either been blamed for constricting the economies with its supranational regulation, or seen as a safety harbour away from political turmoil and market volatility.

All of this has left the public across Europe misinformed and, at best, confused about the reasons their countries are a part of the EU, as well as the benefits – and shortcomings – of the membership. According to the Eurobarometer survey on the 2009 European elections, two thirds of Europeans had said they knew little or next to nothing about what the European Parliament did, and only a third had planned to vote in the elections. In fact, the voter turnout was on average 43% across Europe – the lowest since direct elections to the parliament started in 1979. The disconnect between the European public and the EU clearly remains strong.

But, while the political debate has often been off the point and the media coverage sparse, the public must not, and businesses simply cannot, ignore the EU.

With insufficient public deliberation of the issues within the EU realm of power, it is easy for businesses and their communicators to fail to pay sufficient attention to the EU regulation and decision makers. What they may fail to realise, however, is that many of the fundamental issues affecting their operating environment are being decided at the EU level.

And, while it’s true that member states in many ways dictate the regulatory outcomes, businesses can not ignore the institutional dynamics and the need to find common ground, which play out in the corridors of the EU. Thus, businesses have to look beyond the local political debate to understand the context in which the EU decisions are being made. This is critical to businesses’ ability to frame their arguments in the manner that not only resonates with their political representatives, but is also actionable and likely to lead to real results.

Rather than engage in political blackmail, businesses must put forward arguments and proposals that are workable and can help make not just their own case, but the case for the industries they belong to – within and beyond the national borders.

The EU exists to advance the interests and project the values of member states on the issues they cannot address as effectively on their own – issues such as trade, energy, climate change, migration and security. No matter the sentiments, these issues have to be tackled through consensus of the nations involved, as isolated policies and actions are simply not sustainable.

Inevitably, this means that many local industries and ways of life are being affected – from food production, consumer safety standards and infrastructure planning, to education, research and development, and air quality regulation – all of these are being influenced by the decisions made at the EU level, and not just locally.

In fact, if the long-awaited passing of the Lisbon Treaty actually materialises later this year, the European Parliament’s sphere of influence is set to significantly expand. Members of the European Parliament (MEPs) would become co-legislators with the Council in a number of policy areas – including energy,  common financial provisions, economic interests, the Euro, structural funds, European intellectual property rights, personal data protection, immigration, public health, agriculture and fisheries policies, and tourism.

While the Lisbon Treaty failed to pass in June 2008 due to the Irish rejection in a public referendum, the current public polls suggest that a new Irish referendum would likely result in an approval vote this time around. It is worth noting, however, that due to the sharp fall in  the Labour’s share of voice and the rise of the Conservatives and the far right, it is not entirely inconceivable that the UK may prove a new stumbling block to the passing of the Lisbon Treaty, creating new tensions between the UK and the EU.

Regardless of the outcome, key issues currently on the European Parliament agenda are bound to have, in one way or another, great implications for businesses. These include:

• Economic and Monetary Affairs – If there were any doubts beforehand, the recent collapse of the financial markets brought home the extent of interconnectedness and interdependency of global economies. Regulation of the European single market and financial sector will be high on the EU agenda in the year to come, as nation states look for ways to protect their economies from future market events to the extent that may be possible.

• Climate change and energy – Europe is leading the global dialogue on climate change mitigation. The European standards and global agreement on post-Kyoto climate regime are to be determined at the Copenhagen Climate Conference in December of this year.

• Enlargement – Croatia, Turkey, Albania and Macedonia are official candidates. Others, such as Serbia, Bosnia and Herzegovina, Montenegro and Kosovo, are recognised as ‘potential candidates’. Debates about whether they should join the EU and when will be high on the Parliament’s agenda in the coming years. Iceland, currently a member of the European Economic Area, is also likely to apply for membership in near future.
  p
• Agriculture – MEPs will take part in preparations for the next major overhaul of the Common Agricultural Policy (CAP), scheduled for 2013. The Lisbon Treaty, if ratified, will give the Parliament joint decision making powers with agriculture ministers in this area.
  p
• Immigration – Countries will continue to seek ways to align various national policies.
  p
• Foreign affairs – Current key foreign policy issues include replacing the expired Partnership and Co-operation Agreement with Russia, preventing the disruption of gas supplies from Russia via the Ukraine, removing non-tariff barriers to trade with China, seeking a solution to the Israeli-Palestinian conflict, and monitoring progress towards association agreements with Latin America.

At the time when businesses are preoccupied with ensuring their survival in the face of recessionary pressures, worrying about European elections may be the last thing on executives’ minds. But, it is exactly the same recessionary pressures that are likely to provide an additional argument for paying close attention to what happens at the EU level. Seeing how vulnerable economies are to massive volatility of consumer and shareholder confidence, regulations and agreements made at the EU level are likely to carry more weight than ever, as it is clear that no single country is immune to what happens outside its borders.

The EU member states just elected 736 MEPs to five-year terms. By proportional representation, they will be accountable to half a billion of Europeans, marking these elections as the biggest transnational elections in history. If your business hasn’t paid attention to the workings of the European Parliament and its representative MEPs, the time to begin doing so is now.

To find out where you stand in comparison to the national political parties on issues relevant to the 2009 European Parliament agenda, http://www.euprofiler.eu may be a good place to begin identifying allies and informing your plan of action to ensure your business can both influence the EU debate, as well as prepare for any regulatory adjustments likely to affect the way you operate.

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EU elections – Why should businesses care?

Personalisation, local community involvement, grass roots politics…as an antithesis to today’s globalised world, what we seem to want from our brands, political representatives, even the media, is a sense of home, involvement and belonging.

It is no wonder then that political campaigns leading up to the European Parliamentary elections which have just taken place, focussed, by and large, on national issues – and not Europe. Eurosceptic and pro-European politicians alike have been using the European Union (EU) to manipulate public opinion in their own favour. Depending on the political stripes, the EU has either been blamed for constricting the economies with its supranational regulation, or seen as a safety harbour away from political turmoil and market volatility.

All of this has left the public across Europe misinformed and, at best, confused about the reasons their countries are a part of the EU, as well as the benefits – and shortcomings – of the membership. According to the Eurobarometer survey on the 2009 European elections, two thirds of Europeans had said they knew little or next to nothing about what the European Parliament did, and only a third had planned to vote in the elections. In fact, the voter turnout was on average 43% across Europe – the lowest since direct elections to the parliament started in 1979. The disconnect between the European public and the EU clearly remains strong.

But, while the political debate has often been off the point and the media coverage sparse, the public must not, and businesses simply cannot, ignore the EU.

With insufficient public deliberation of the issues within the EU realm of power, it is easy for businesses and their communicators to fail to pay sufficient attention to the EU regulation and decision makers. What they may fail to realise, however, is that many of the fundamental issues affecting their operating environment are being decided at the EU level.

And, while it’s true that member states in many ways dictate the regulatory outcomes, businesses can not ignore the institutional dynamics and the need to find common ground, which play out in the corridors of the EU. Thus, businesses have to look beyond the local political debate to understand the context in which the EU decisions are being made. This is critical to businesses’ ability to frame their arguments in the manner that not only resonates with their political representatives, but is also actionable and likely to lead to real results.

Rather than engage in political blackmail, businesses must put forward arguments and proposals that are workable and can help make not just their own case, but the case for the industries they belong to – within and beyond the national borders.

The EU exists to advance the interests and project the values of member states on the issues they cannot address as effectively on their own – issues such as trade, energy, climate change, migration and security. No matter the sentiments, these issues have to be tackled through consensus of the nations involved, as isolated policies and actions are simply not sustainable.

Inevitably, this means that many local industries and ways of life are being affected – from food production, consumer safety standards and infrastructure planning, to education, research and development, and air quality regulation – all of these are being influenced by the decisions made at the EU level, and not just locally.

In fact, if the long-awaited passing of the Lisbon Treaty actually materialises later this year, the European Parliament’s sphere of influence is set to significantly expand. Members of the European Parliament (MEPs) would become co-legislators with the Council in a number of policy areas – including energy, common financial provisions, economic interests, the Euro, structural funds, European intellectual property rights, personal data protection, immigration, public health, agriculture and fisheries policies, and tourism.

While the Lisbon Treaty failed to pass in June 2008 due to the Irish rejection in a public referendum, the current public polls suggest that a new Irish referendum would likely result in an approval vote this time around. It is worth noting, however, that due to the sharp fall in the Labour’s share of voice and the rise of the Conservatives and the far right, it is not entirely inconceivable that the UK may prove a new stumbling block to the passing of the Lisbon Treaty, creating new tensions between the UK and the EU.

Regardless of the outcome, key issues currently on the European Parliament agenda are bound to have, in one way or another, great implications for businesses. These include:

§ Economic and Monetary Affairs – If there were any doubts beforehand, the recent collapse of the financial markets brought home the extent of interconnectedness and interdependency of global economies. Regulation of the European single market and financial sector will be high on the EU agenda in the year to come, as nation states look for ways to protect their economies from future market events to the extent that may be possible.

§ Climate change and energy – Europe is leading the global dialogue on climate change mitigation. The European standards and global agreement on post-Kyoto climate regime are to be determined at the Copenhagen Climate Conference in December of this year.

§ Enlargement – Croatia, Turkey, Albania and Macedonia are official candidates. Others, such as Serbia, Bosnia and Herzegovina, Montenegro and Kosovo, are recognised as ‘potential candidates’. Debates about whether they should join the EU and when will be high on the Parliament’s agenda in the coming years. Iceland, currently a member of the European Economic Area, is also likely to apply for membership in near future.

§ Agriculture – MEPs will take part in preparations for the next major overhaul of the Common Agricultural Policy (CAP), scheduled for 2013. The Lisbon Treaty, if ratified, will give the Parliament joint decision making powers with agriculture ministers in this area.

§ Immigration – Countries will continue to seek ways to align various national policies.

§ Foreign affairs – Current key foreign policy issues include replacing the expired Partnership and Co-operation Agreement with Russia, preventing the disruption of gas supplies from Russia via the Ukraine, removing non-tariff barriers to trade with China, seeking a solution to the Israeli-Palestinian conflict, and monitoring progress towards association agreements with Latin America.

At the time when businesses are preoccupied with ensuring their survival in the face of recessionary pressures, worrying about European elections may be the last thing on executives’ minds. But, it is exactly the same recessionary pressures that are likely to provide an additional argument for paying close attention to what happens at the EU level. Seeing how vulnerable economies are to massive volatility of consumer and shareholder confidence, regulations and agreements made at the EU level are likely to carry more weight than ever, as it is clear that no single country is immune to what happens outside its borders.

The EU member states just elected 736 MEPs to five-year terms. By proportional representation, they will be accountable to half a billion of Europeans, marking these elections as the biggest transnational elections in history. If your business hasn’t paid attention to the workings of the European Parliament and its representative MEPs, the time to begin doing so is now.

To find out where you stand in comparison to the national political parties on issues relevant to the 2009 European Parliament agenda, www.euprofiler.eu may be a good place to begin identifying allies and informing your plan of action to ensure your business can both influence the EU debate, as well as prepare for any regulatory adjustments likely to affect the way you operate.

New Capitalism – New Politics?

Second home, anyone?

The past six months have been dominated by discussions of the broken financial system and flawed ideologies. A crippling global recession has given rise to mass disillusionment with the fundamental principles of capitalism and called time on self-interest as acceptable motive in business conduct. The reverberations of the 2008 crash are still being felt within the real economy: in the UK, familiar high street names continue to disappear; repossessions are up 50% year-on-year, and unemployment is steadily climbing towards 3 million. In the States, just days ago, Barack Obama was forced to step in to save General Motors as it filed for bankruptcy. Talk of ‘green shoots’ is sporadic and unconvincing.

In the wake of the financial crisis, the UK is facing an equally profound political one. The MPs’ expenses scandal has laid bare a culture of legitimised corruption in Westminster; and the slow response from party leaders and their subordinates has exposed acute disengagement from the electorate.  Public anger previously directed towards Fred Goodwin and his ilk has not only shifted onto our politicians, but has intensified.  MPs are increasingly lumped together with ‘Fat Cats’, as there is a growing perception that bankers and politicians are motivated by the same greed and selfishness.  MPs with their hands in the till are aligned with the banks they bailed out, and as such, in opposition to the individuals and communities that elected them.

Reform, reform, reform

As the public outrage continues to grow, party leaders have fallen over themselves to propose a range of reforms. David Cameron delivered a speech touting a progressive Conservatism that set out ideas for a decentralised, ‘post-bureaucratic’ era. Nick Clegg has called for far-reaching reforms to be agreed within a hundred-day timetable. The Guardian recently produced a supplement entitled ‘A New Politics’, detailing wide-ranging suggestions, from fixed-term parliament to the removal of the monarchy.

There is a broad consensus both within and without the House of Commons that Westminster needs to modernise, it is a question of scale. The Jenkins Report has been on a back burner since it was completed in 1998 but it could now be rejuvenated; its recommendations – including electoral reform and further transformation of the second house – suddenly merit serious consideration. What is certainly clear as the political clean-up commences is that, as with the banking sector, self-regulation is simply no longer an option.

Apathy or activism?

Politicians are being forced to reassess the way they communicate. British politics has tried to learn from Barack Obama, whose campaign successfully used social media to engage with the electorate. The efforts so far have yielded mixed results – Gordon Brown’s YouTube debacle stands in clear contrast to John Prescott’s surprising success with blogging on his Go4th website.  There is a slow realisation that polls, focus groups and even the media cannot alone be trusted as accurate barometers of public sentiment.

The local elections have taken on an important new symbolism – a return to grassroots politics, an opportunity for the electorate to punish their representatives, an outlet for frustration. The public is demanding re-engagement from politicians.

The protest votes just in from the European and local elections could be brutally damaging to the main parties, as both UKIP and the Green Party have made significant gains.  The cocooned Westminster-centric perspective will not be allowed to endure: after decades of apathy, voters want to hold their representatives to account, demanding real transparency and the opportunity to scold with an audible voice.

MPs will try to realign themselves with their constituents: grassroots activism and constituency work will regain importance.  Politicians will have to demonstrate real interest in the communities they represent. Local politics though, is no longer just about street lamps or road works – it is now also about national issues in a local context. Politicians will have to recognise this and modify their communications appropriately.

Republic of Britain?

Is the ‘mother of all parliaments’ about to crumble? Will the monarchy be removed? Will the Speaker of the House finally stop employing someone to carry his train?

No. Just as capitalism emerges from the financial crisis battered but intact, so the expenses scandal will not raze the House of Commons to the ground.  MPs will probably remain ‘right’ and ‘honourable’, but the debate on the nature of UK politics will continue. Whatever the eventual reforms amount to, there will be a tangible shift in the way politicians conduct both themselves and their politics.

The reliance on polls and focus groups will by no means end, but real interaction in the constituency will take precedence.  In the aftermath of the local and European elections, any number of reforms may be implemented. The most significant change will be a more subtle cultural shift within Westminster as MPs return to a truly local, and ultimately more personal brand of politics.