This year marks the twenty-fifth anniversary of the origins of what is now the UK’s Corporate Governance Code. There’s no doubt that it has had a hugely positive effect , both in raising awareness of the need for better governance and on improving standards of ethics . It is certainly something the UK can be proud of.
But we can’t afford to rest on our laurels. Indeed, given the uncertainty facing us, I believe it is more important than ever that companies embrace better governance – and through it, focus harder than ever on a service driven agenda.
The challenges of Brexit, a lower exchange rate, and other factors such as the Living Wage, mean that it will become harder for many businesses to compete. Those organisations that see customer service as a key strategic driver to be measured and acted upon will be the ones who succeed.
After all, around 70% of the UK workforce are in customer related roles and nearly 80% of our GDP is service related.
And this matters because better service is often at the heart of better business. Indeed, across many sectors, our research shows that higher levels of customer satisfaction lead to increased customer spend and higher market share.
Yet, as positive as companies’ adherence to the corporate governance code is, there is more that they can do – and that they need to start doing urgently.
To start with, I would like to see it mandated that companies talk about the customer experience, and their measurement of it, in their annual reports. I would also like to see them formally reporting on interactions with customer representatives or committees – picking up the voice of the customer and showing not only their measurement of customer satisfaction, but what they have then done about it: closing the loop in a ‘you said/we did’ fashion. To this end, I believe all Boards should have a non-exec who acts as the champion of the customer and who meets with customer committees and groups.
We also need the investor community to wake up to the importance of service as a strategic differentiator – and one that requires a longer term view. We need to move away from the short-term cycles that dominate many FTSE companies; to focus on longer term performance rather than short-term gains. It’s about taking a ‘balanced scorecard’ approach.
If embraced properly, the code can feed the right behaviours and culture down through the organisation so that individuals, in management or the front line, actively understand what the organisation’s purpose is and where the boundaries are.
And, one thing is clear. The code can also be a powerful agent for better corporate culture; one that is even more powerful when linked to a service agenda.
In a time of Brexit, ‘fake news’ and increasing complexity, it is time for organisations to redouble their efforts to create that link.