| First Partnership Audit |
[ Finding out how our principles measure up in practice ]
In this document, we are fulfilling a pledge we made a year ago when we introduced our Partnership Approach.
At that time, we defined seven groups involved in or affected by our business: our Shareholders; Customers; Staff and their Families; Suppliers; Local Communities; National and International Society; and Past and Future Generations of Co-operators. We promised to produce an independently verified audit of our activities, showing what impact they had on each of our Partners.
Before we enter into the detailed findings of our Audit, a brief reminder of what our Partnership Approach is all about.
[ Partnership - part of a bigger picture ]
Throughout the commercial world there's greater awareness than ever that businesses shouldn't just exist to generate profit for shareholders. As a recent MORI survey shows, consumers are making it very clear they want to deal with companies that take a much broader view of what their role should be:
"Spontaneously, the main elements of social responsibility continue to be seen as environmental care, employee welfare, community involvement and responsiveness to customers... 80% of the public say knowledge of a company's activity in this area is important to their judgement of a company. . . almost two thirds believe British industry and commerce are paying insufficient attention to their social responsibilities".
In the face of such overwhelming demand for greater social responsibility, many companies are beginning to reconsider their priorities. New ways of measuring all-round business performance, such as Environmental Auditing, are becoming increasingly fashionable.
However, while our Partnership Approach has a lot in common with these recent developments in the business world, it goes back much further.
As part of its Partnership Approach The Co-operative Bank to deliver value and to operate in a socially responsible and ecologically sustainable manner.
[ The evolution of our partnership approach ]
Introduced fully in 1997, our Partnership Approach has evolved over a 10 year period. In that time, there have been three key developments:
Our Mission Statement - Published in 1988, this aimed to define how the original principles of co-operation could provide the basis for a successful business in the modern world. A central theme was the principle of inclusion; the belief that we should take account of the interests of all parties affected by our activities, not just shareholders.
Our Ethical Policy - Announced in 1992, and developed in close consultation with our customers, this sets out as clearly as possible who we will and will not do business with. It's been criticised by some, but its enormous success could never have been achieved unless it had genuinely reflected the beliefs and wishes of our customers. And to ensure it continues to keep pace with their changing concerns, we regularly consult our customers, and make revisions accordingly.
Our Ecological Mission Statement - In our Ethical Policy, we promised to invest our customers' money in companies that avoid repeated damage of the environment. But in 1996, we went much further - setting out, in four rules, our understanding of the minimum conditions for an ecologically sustainable society. The purpose of this was to enable us to identify areas of business activity that fail to meet these conditions, enabling us to draw up an action plan that reduces economic dependence on such activities. The ecological considerations that make up the Mission Statement are essentially non-negotiable facts of life. Therefore, it is not anticipated that the statement will require constant revision.
[ Our partnership approach - a natural progression ]
Last year, with the introduction of our Partnership Approach, we brought these strands together. To us, it seemed clear that the next inevitable step was to commit ourselves to delivering benefits to all our Partners in a socially responsible and ecologically sustainable manner. More than that, we needed to acknowledge our interdependence: just as our Partners depend on us, so we depend on them for our continued success, and must run our business accordingly.
It may sound straightforward in theory; but in practice, it presents enormous challenges - the biggest of all being the question of balance.
[ Partnership and the question of balance ]
In many cases, it's a simple matter to define a specific obligation towards one of our Partners, and to work towards fulfilling it. But, from time to time, we're faced with a conflict of interest.
For example, last year we closed and relocated a number of our personal branches. This was warranted as these particular facilities were poorly utilised. All customers still had access to our telephone banking service, and recently have been able to conduct day to day transactions at local Post Offices throughout England and Wales. However, our research would indicate that a number of customers were concerned that closure would have a negative impact on the towncentre and local community.
Put simply, what this case illustrates - along with many others like it - is that we can't please all of our Partners all of the time. For us, accepting this, and trying to achieve the best balance possible, is the most critical aspect of making our Partnership Approach work in practice.
It's also, of course, the reason why we need a Partnership Audit. If we could deal with each of our Partners in isolation, it would be easy to determine whether we were acting in their interests. But because each Partner relationship affects all of the others, we must attempt to gauge as accurately as possible how far we are succeeding in fulfilling our responsibilities.
[ Partnership auditing - seven groups, three areas of assessment ]
So how did we go about conducting our first Partnership Audit? First we established a Partnership Development Team, whose responsibility it was to undertake a detailed assessment of the Bank's performance in relation to each of our Partner groups. To achieve this, research was undertaken to determine the areas of priority for each Partner. What were they seeking from their relationship with the Bank, and to what degree did we deliver value? Furthermore, was value delivered in a socially responsible and ecologically sustainable manner?
Three areas of assessment:
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| Only by delivering real value to each of its Partners can the Bank ensure that it remains viable for another century and a quarter. Therefore we have determined the issues that matter most to each Partner and measured our performance accordingly. | |
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| Our Customers,and other Partners, have indicated to us on more than one occasion that value should be delivered in a socially responsible manner. To this end, we have assessed to what degree we have treated each Partner in an ethical fashion. | |
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| The world in which we, and all our Partners live has a limited capacity to provide for us. Ensuring that this is recognised and incorporated into business strategy is critical to long-term success. | |
Having assessed our performance over the past 12 months in this way, the next step was to set new goals for the year to come. For each Partner, individual managers have signed off all future objectives, taking personal responsibility for performance in that area.
[ Opening the books - a matter of trust ]
Our Partnership Audit gives us the opportunity to explain not only what we are doing, but why we are doing it. Having made the decision that only a "warts and all" assessment of the Bank would meet the demands of Partnership, we have as far as possible used data that has been independently verified by a credible third party.
For example, the way we contribute to the development of our staff has been assessed by Investor in People. The degree to which we appreciate and respond to the interests of each Partner is assessed by the Centre for Tomorrow's Company. Our sponsorship and donation policies have been analysed by Business in the Community. And the organisation called ethics etc... have assessed a whole range of areas where we know our performance is of particular interest to Partners. The statement overleaf explains who ethics etc... are, the scope of their assessment, and how they went about it.
[ Partnership auditing and the bank of the future ]
We believe that only through a continuing process of defining our responsibilities, assessing our performance, and agreeing new objectives together with our Partners can we maintain and strengthen our position as Britain's only truly "co-operative" bank. We hope you'll find our first Partnership Audit interesting, and look forward to hearing your comments.