Fighting fraud, challenging corruption and embracing environmentally responsible business practices are key challenges for today’s organisations – and accountants have a vital role to play.
Professionals in the public sector as well as in the corporate world can bring their expertise to bear to ensure good governance, working with stakeholders in managing risk and delivering good business ethics.
Speaking at ACCA’s recent ‘Talking public sector’ virtual event, Peter Swabey, policy and research director at The Chartered Governance Institute, told virtual attendees that the key to ensuring robust governance is to appoint the most appropriate people in those roles and furnish them with the right information to enable them to exercise their duties effectively.
Public sector pensions schemes are major players in investment markets and can have a significant impact on companies’ behaviour
Rachael Johnson – ACCA’s head of risk management and corporate governance, professional insights – added that it is vital to establish a culture of challenge and trust, and that all relevant stakeholders must be involved in creating a governance culture.
Empower employees
Calling out issues of poor governance is a particular challenge, Rachel Bleetman, ACCA’s public sector research and policy manager, pointed out. Organisations often avoid issues that may fundamentally expose negative modes of operation in an organisation.
It is important that a culture is created that empowers employees to raise issues associated with governance, she added, even if they impact on senior figures within an organisation.
This can be particularly challenging for finance professionals when they need to take a public stand on difficult governance issues. An example of this in the local government sector is the serving of a statutory section 114 notice in the case where a local council overspends its revenue budget.
Pension power
Discussions during the virtual event last month highlighted that governance concerns extend beyond the organisation to the stakeholders they engage with – in particular, pension funds.
Funded public sector pensions schemes are significant players in world investment markets and can have a significant impact on the behaviour of companies.
Pension trustees in the public sector are increasingly looking to invest in companies that have policies that are congruent with the ethical and governance positions that the funds take. This can range from promoting green values to providing workers in manufacturing industries with employment rights.
Through the power they possess, pension funds can play a key role of promoting positive governance messages throughout the wider business environment.
The event’s discussions serve to highlight that governance is now a major issue for professional accountants operating in the public sector. There is a challenge for all of us to add value in our roles as finance leaders and expert advisers. Through doing this, we can contribute to the health of our organisations and the improvement of society.
