“We have to get hope back in the system,” said Richard Edelman at the recent World Economic Forum following the presentation of the 2023 Edelman Trust Barometer.
This year’s Trust Barometer was a call to action for governments, business, and other institutions to promote competence and ethics in response to one of the worst consequences of the global pandemic – the loss of trust in experts and officials and the information they provide.
Scrutiny and accountability are critical for trust and confidence
The Trust Barometer report highlights the declining confidence in social institutions internationally, but against that we can take some heart from the positive report card that New Zealand’s public sector and judiciary continue to get from Transparency International. But we cannot be complacent.
A central element in maintaining trust in our government and other public institutions is ensuring they are subject to appropriate scrutiny, particularly in the wake of some incident or episode that has the public wanting to know what happened and why things went wrong.
At MartinJenkins, we have years of experience carrying out independent reviews, inquiries, and evaluations, and supporting other forms of public scrutiny that help maintain trust and confidence in public institutions. We have amassed a lot of knowledge on what to do, and what not to do.
From that experience in the shoes of the reviewer knocking on the door, we have some insights to offer public-sector leaders on how best to respond to the challenge of being reviewed. Many of these also apply to companies who are funded or regulated by Government.
Faced with a review, leaders within the public sector need to stay focussed on their enduring stewardship responsibilities and prepare their employees to participate constructively. In the private sector, the responsibility to respond constructively is the same – investors are sensitive to immediate damage to the brand and to longer-term erosion of the company’s value, particularly as a result of poor relationships with regulators.
We see four key phases within a constructive response to an inquiry. These lessons also translate to other forms of external scrutiny that don’t have official powers, such as evaluations or value for money reviews.
Phase 1. Managing the immediate response
A swift call for scrutiny of an organisation through an external review is typically in response to an event or incident. But regardless of the reason for calling in the reviewers, the response should be the same.
Care for your clients, customers, and employees
First, make sure people are safe and that they can get the support they need.
At this stage it’s also important that your employees understand that the catalyst for the review is most likely bigger than them. And while we are on this it is worth a reminder – it is most likely bigger than you too!
Make sure you understand and meet your legal and other obligations
You need to have a solid understanding of your legal and other obligations.
You also need to take care of your customers, patients, or other clients, and your stakeholder relationships. If you are a government entity, this is when your no-surprises reporting to your Minister kicks in. And it’s important to get that order right.
Prepare your information
This includes documenting your organisation’s decision-making with contemporaneous notes that record the rationale for decisions. You should also note the limits of the information on which you’re basing your decisions. It sounds trivial but getting a good taxonomy of relevant information and evidence is critical at this stage and can be labour intensive – so you need to get on to it smartly.
Remember – this is about having your records in order. Not ordering your records to tell a flattering story.
Communicate well
Take action to ensure that everyone who should be aware of what has happened is aware. Err on the side of transparency.
If it’s a crisis, follow a crisis communication approach – this includes, importantly, having a single spokesperson.
If you need to apologise, do it properly and authentically. Apologise directly and have empathy.
Phase 2. Preparing for external scrutiny
Organisation's facing a review often don’t prepare sufficiently for this scrutiny.
Preparation is everything. During the preparation phase, be continuously mindful of the purpose of the review. Prepare for it to be effective and to run smoothly. This will make the experience less stressful for you and your people, and the findings most impactful for your stakeholders,
We see the following dimensions to this:
Bring an open mind
In our experience, the organisation follows its leader in this regard. if you model defensiveness, your people will too. Think about the actions you can take to model your cooperation.
If possible, shape the terms of reference.
If you have the opportunity (and it is appropriate), shape the terms of reference to ensure that the questions that are asked to get to the heart of the issues. A clear set of questions, with the flexibility to allow the reviewers some clear discretion for judgement is a good balance.
It’s also critical that the questions are ones that can be realistically answered within the time set for the review.
Support your employees
You need to balance the value of a Just Culture approach that focuses on what went wrong against the right of the public or a company’s shareholders to hold someone to account.
It’s also critical that in the preparation for interviews there’s no scripting or colluding. In some cases, it might be appropriate to ensure that employees get legal advice.
Employers should ensure that their employees understand their role within a review and that there are broader factors at play. You must also take steps so they understand that the requirements of natural justice will be observed in the review process, particularly the employee’s right to be heard.
Appoint the right reviewer
If you are selecting the reviewer, you need to consider the scope of the review or inquiry. Consider also whether the reviewer may need access to some statutory powers that only lawyers can exercise.
Appointing multiple reviewers may be appropriate if there are complex issues that require different skill sets. But in that case, you may need to allow more time for the review.
It is also important that reviewers have experience and understanding of rights and obligations under te Tiriti o Waitangi.
Organise your information
Ensuring that your information is well organised will assist the reviewers greatly.
Engaging a forensic auditor can often be the best approach when there are large amounts of information.
Phase 3. Supporting the review
Once a review is underway, things often begin to feel real. This is usually the most challenging stage, particularly if the organisation’s leaders have not prepared it well for the review.
In our experience, those who manage this stage well do several key things:
Manage the relationship with the reviewers well
To give the reviewers a clear pathway into your organisation, you need to appoint the right person to be a contact point and to facilitate the review – this should be an experienced executive who gets the strategic context but is also not a party to the review itself. This is often a challenging role as it puts pressure on collegial relationships. This aspect needs to be tackled head on.
Resource any information requests appropriately
Make sure you have enough skilled, experienced employees to respond in good time to information requests from the reviewers.
Be open and transparent throughout the process – skilled reviewers can easily spot people being cute with the truth and selective with information.
Support your employees through the review
It’s important to focus on the wellbeing of your employees throughout the exercise. In some cases, this might require additional support or care in the form of wrap-around services (like EAP) or separate legal advice.
Ensure that natural justice requirements are met
The design of the review or inquiry needs to provide for natural justice processes, especially to ensure that both the person and organisation have the right be heard.
In some cases, these processes will be formal ones (for example, if there are disciplinary proceedings). In other cases, they may be less formal, such as sharing the reviewers’ draft findings with relevant employees.
Phase 4. Receiving the review and implementing the findings
Once the external review is complete, your organisation’s real work begins. This could include, for example, an overhaul or update of your strategy or organisational design, a tweak of the regulatory settings you administer, or, potentially, disciplinary processes.
Report your intended response to key decision makers
As part of developing your response, report on your intentions to the executive team, board, or Minister. This will help socialise your intended response with them and gauge their appetite and support for change.
Recognise the significance of the review and your response
Recognise the contribution of your employees to the review process, no matter what the outcome. In addition to doing this publicly, recognise them internally as well. Check in with how people are feeling and ensure that you keep modelling the culture that you want within your organisation even when the scrutiny has lifted.
Explicitly recognising the significance of the review and your response to it will help build and demonstrate an internal culture as a learning organisation. That positive culture will also support you the next time you face this type of organisational scrutiny – because you inevitably will.
Do an “after-action” review
Whether or not the findings are critical of your organisation, it’s good practice to do an “after-action” review with the person or team who did the review. Among other things, hearing some of the reviewers’ more informal observations may be useful for you.
Edelman has implored business and government agencies to work collaboratively to get trust back in the system. More than ever, the way we respond to scrutiny is going to be critical to overcome distrust and misinformation.
Sarah Baddeley is an executive director of MartinJenkins, and provides advice to organisations facing the uncomfortable prospect of a review or other external scrutiny.
Penny Fitzpatrick leads our research and evaluation practice – she designs engaging processes that strengthen clients’ capacity for continuing improvement.
