Tuesday 28 February 2017

The certified way to boost confidence in your company

Maurice Buckley says it would be wise for firms to adopt a code and have it accredited -- with investor confidence badly damaged by the banks, it could make all the difference. By John Mulligan

Like teeth fillings, business certifications and standards might not be particularly interesting for most punters, but Maurice Buckley does a pretty good job of selling them. As chief executive of the National Standards Authority of Ireland (NSAI), Buckley and his team of 170 help companies to gain international certification -- the ISO 9000 management standard being probably one of the best known -- and represents Ireland in debates surrounding the establishment of international standards. And while Buckley thinks securing certification and having input into international standards debates can provide significant payback for firms, he admits that Irish companies have been slow on the uptake. Reasons for that can vary from the associated cost to a perception that the requirements of doing so will be onerous. "For years I worked for small companies and I'd tell suppliers that we had a programme to implement ISO 14,000 or some other standard, and while we would genuinely have a programme to do so, as a small company we couldn't actually afford to do it," he recalls.

"A lot of companies would follow best practice detailed in a standard but don't have the certificate on the wall," he adds. "But there's a real benefit to the formal certification process."

Buckley reckons that in light of what happened within the financial system -- particularly regarding investor faith -- standards could face the prospect of a golden corporate era.

Many firms already try to adhere to the principles enshrined in the UK's Corporate Governance Code, but often its rulebook is flexibly enforced.

The NSAI -- a semi-state body -- has a new standard called Swift 3,000 where a company's adherence to its own corporate governance rules is vigorously vetted in conjunction with the Institute of Directors.

"The Swift specification was developed very quickly to allow companies to achieve certification that says the way in which their board operates and the way they manage the organisation at a high level is done according to best practice.

"Over time, in the private sector, we see that perhaps this certification could become a requirement in order to secure capital investment."

Buckley adds that Swift 3,000 doesn't create another corporate governance code, but tests a company's claims in relation to the rules it says it enforces.

"It's not always possible to have everything right in either large or small companies. But the standard forces a company to explain why something is the way it is."

But will companies be slow to adopt such a standard? Buckley thinks it's a possibility. "The more that say they're prepared to subject themselves to the strictest scrutiny, then other companies will eventually be forced by the markets to strive for a higher performance level."

To date, five or six firms have engaged in the Swift 3,000 process -- a figure Buckley hopes will rise to as many as 20 by the end of the year.

The NSAI is also having to cut its cloth in a new economic reality. Last year it received about a third of its €25m budget from the government, with the remainder being comprised of commercial income.

"We're steadily reducing the burden on the taxpayer," says Buckley. "We want to be as lean as we can, but we haven't increased any of our fees."

While there are 170 staff employed by the NSAI at the moment (there was 210 in 2009), the number is set to fall to 140 over the next five years.

Buckley is keen to expound the benefits of firms getting involved in setting standards, with those involved in research and development, for instance, having much to gain, he says.

Between flights and accommodation, he says, the cost of attending meetings where standards are developed might be €10,000 over a five-year period. Aside from the fact a company then has input into how a standard is set, such meetings are also networking opportunities.

"You don't have to follow through the whole process either, so it may not cost that much. Companies involved in R&D should participate."

Meanwhile, Buckley believes there's significant scope for standards to create greater efficiencies within the civil service.

"When your product isn't as clear-cut as it is in a private company, it makes it more difficult in relation to standards. You have to have a clear output that you can influence. That's why you should start at the customer-facing services, because you can measure performance," he explains.

"You should allow more local autonomous management once standards are in place. Then give a body its budget and tell them to deliver. If they don't, they don't get the same budget next year."

Buckey -- who's a member of the sub-committee of the Implementation Body for the Croke Park Agreement -- says there has been no real public service reform yet.

He's very hopeful that the new government will take strong steps to initiate that reform, however. But it's still likely to be as tough as pulling teeth.

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