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We are always at the point where past and future meet and it is the only point where decisions are made…decisions that can have profound impacts.
This time of year it is traditional to look back over the past year and consider what may lie ahead in the next. We will do a bit of that in this, the first part of a two-part article on the topic of remediation.
No one looks forward to a remediation program but the opportunity to better understand them can be helpful.
We might start with searching Google for the meaning of the word ‘remediation’. One that seems useful: “Remediation is a word for fixing things that aren’t right.”
Notice that there is no aspect of time in this definition…no mention of the past, present or future.
You will find that the words ‘regulatory compliance’ are not used in this article (beyond here). Whilst this could have been an article seeking to create fear as a motivation for action by highlighting potential regulatory and related reputational consequences (which reading the headlines is increasingly real and painful), this article does not seek to leverage the threat of APRA, ASIC, ACCC, AUSTRAC or any of the other regulators.
This is intentional, as we believe “fixing things that aren’t right” is an inherently good practice rather than important only to avoid negative regulatory consequences.
Contrary to the message you might regularly find in media reporting, our observation is that businesses overwhelmingly do not intentionally seek to do wrong or cause harm. Instead, things that aren’t right are the generally the result of an oversight (failure to sufficiently consider all of the consequences of the actions we take – or choose not to take).
In this, the first of a two part series, we will look at remediation relative to the present and the past.
In the new year we will look again at remediation, in relation to the present and future.
The present and past – “fixing things that aren’t right”
“Fixing” anything requires a conscious decision to do so. Working with clients over the past several years has shown it to be challenging to make the decision to allocate resources to look back, analyse what actions were in fact taken (or not taken) and categorise the resulting outcomes, perhaps fearful of what they might find. Those that have, we believe over the longer term will benefit as they either re-establish or reinforce trust from their client and investor base.
Culture is a word getting plenty of discussion recently with varying perspectives about what it means. It seems pretty clear though, developing and sustaining an effective culture takes courage, conviction and a willingness to be accountable for the consequences of your own actions as well as the collective actions of the organisation.
Recently a CEO recounted what happened at their AGM when asked by a media representative about a recent remediation program. He explained how the business accepted responsibility and took action to “fix things that weren’t right”.
He talked about how his business brought in expertise to expedite and validate the appropriate member focused response and prioritised making good on past mistakes. His response was met with applause from the members for the business taking responsibility for the errors it made and demonstrating a member first mentality. Sadly, that was certainly not widely reported in the media.
This was one of half a dozen remediation programs we have led during the year which have led to successful customer outcomes and a foundation for rebuilding trust.
Seeing the consequences of a remediation can require a different perspective, a different pair of eyes. Businesses generally look at and assess performance from an overall or portfolio perspective – considering how ‘the business’ fared as a result of what was or wasn’t done.
Remediation requires one to look at things from the customer’s perspective – how ‘they’ fared as a result of the actions taken or not to taken by the business. We’ve yet to experience a situation where poor customer outcomes were intended, which can make it harder for a business to separate outcome from intent and re-examine the situation.
Remembering that the consequence to the customer is only about their transaction; the link between the answer to first and second question is the determining factor as to the scale of remediation required.
So, assessing the need for remediation can be boiled down to two primary questions:
- To what extent were things done correctly? and when they were not;
- Was there any customer harm caused as a consequence.
What if the number of instances of harm is small? Is there still a need to remediate?
The answer lies again in considering the appropriate perspective. What if you were one of the few harmed – what would your expectation be? Would the fact that most others were not satisfy you – almost certainly no.
Next there is the question of – ‘so what?’. In those instances where there was harm, what action would be fair and reasonable based on specific circumstances for that customer?
Here is simple visual recap of what is involved in remediating the past.
Success in business is increasingly about meeting community expectations…not just the letter of the law…and where you have fallen short taking responsibility, which includes both compensating where appropriate and taking the steps necessary to prevent recurrent issues.
In the next article we will explore the present and future – relative to “fixing things that aren’t right”.