"PAYING FOR GOOD"

In this week’s ‘PAYING FOR GOOD’ podcast, I welcome Maia Kirby. Maia is Outreach Coordinator at Good Jobs First, a non-profit organisation based in Washington that created the Violation Tracker in 2010.

In this episode of the ‘PAYING FOR GOOD’ podcast, I welcome back regular guest and chartered statistician Nigel Marriott. 

As we face a cost of living crisis, employers face a wage inflation crisis. This is what we’re turning our attention this week.

This week, I’m delighted to welcome Danny Meehan from Cushon who is talking to us about workplace savings (pensions and ISAs) on the ‘PAYING FOR GOOD’ podcast.

Cushon’s strategy to meet net zero by 2026 says that it’s the first net zero pension provider to invest in low carbon emitters and organisations with high SDG scores, while excluding sectors like thermal coal.
 
You might want to reach out to Cushon if:

• you have made net zero commitments and are looking for another way of achieving your pledge.
• you are reviewing your wellbeing strategy.
• you want to help your employees build healthy saving habits.

“The ethnicity pay gap: how to take action”

This week, I’m delighted to welcome Nigel Marriott, independent Chartered Statistician, back on the ‘PAYING FOR GOOD’ podcast. Last time Nigel appeared on the show, we discussed the gender pay gap. This time we’re focussing on the ethnicity pay gap.

"Modern slavery"

The migrant crisis between France and the UK made the headlines again last week with another terrible tragedy – 27 people losing their lives as they made the perilous journey across the Channel in an inflatable boat, hoping for a better life on our shores. 

“Paying for waste.”

The pandemic has made us all realise how much we take the availability of supplies for granted, and what happens when the chain breaks. Here are some examples:

• We see empty shelves in shops.
• Safety equipment is not available and health risks are increased.
• We queue for hours and become irritated.

To talk about this highly complex topic, which involves a multitude of players, often global and disconnected, I invited a special guest to this week’s ‘PAYING FOR GOOD’ podcast: Annika Howse, the founder of Altrubi, a sustainable supply chain management consultancy. She specialises in the food and fashion industries, and argues that the current model is broken. Listen to her here.

“If you’re not working on the integration of ESG and incentives already, you’re lagging behind.”

Cevian made a public statement on 3 March 2021 asking for ‘significant, measurable and transparent ESG targets that should form part of senior management compensation plans for all European public companies. And therefore Cevian Capital is today calling upon European public companies to start or accelerate the development of such ESG targets for integration into compensation plans to be put to shareholder votes at the AGMs in 2022.’

My special guest this week is Harlan Zimmerman, Senior Partner at Cevian Capital, who explains the rationale behind this far-reaching statement. As you would expect from my thought-provoking podcast, I also ask Harlan how incentives are structured at Cevian for its own employees. Listen to him here.

"Let's be bold!”

Have you heard of the term ‘greenwashing’? This is when an organisation is not accountable for its impact on sustainable development. Now, a new trend is emerging: ‘rainbow washing’. It applies to firms that say they’re embracing the UN Sustainable Development Goals (SDGs) yet do not provide details about what they’re doing, nor how they’re going about it.

I wanted to call out this abuse of surfing the growing sustainability wave, so I invited this week’s special guest on my ‘PAYING FOR GOOD’ podcast, Dr Carol Adams, Professor of Accounting at Durham University and immediate past Chair of the Global Reporting Initiative (GRI) Stakeholder Council, to give her thoughts on the subject.

“LET'S ACT AS ONE”

I’d like to invite you to listen to this week’s guest on my ‘PAYING FOR GOOD’ podcast: Henry Bishop, who co-founded climate tech subscription platform, Furthr, 18 months ago. Furthr aims to incentivise mass action from the workforce on climate change.

Your action takeaway from Henry:

Henry welcomes the opportunity to talk with potential investors, partners and employers who would like to be involved in the venture. You might want to consider the Furthr (white-labelled) platform as part of your benefit offering. They are also in the process of developing a new app that will be ready in the next six months. So, watch this space!

'REMUNERATION GOVERNANCE'
This week on my ‘PAYING FOR GOOD’ podcast, we’re turning our attention to Remuneration Governance. David gives us an update on the codes and recent research linked to remuneration commissioned by the FRC. I also ask him three questions. Bearing in mind the events of the past 18 months:

• Has the remit of the remuneration committee changed?
• Have we got the right people sitting on remuneration committees?
• Do we need to review the remit of external auditors?

Your action takeaway from David:

When reporting on your Remuneration Governance, focus less on process and more on activities and outcomes:

• What activities took place?
• Were they successful?
• If not, what would you do differently in future to improve?
• What did you learn?

In this episode, you will learn from Mary and Jaime about:

• why paying a fair share of tax is a material issue for investors, employees and consumers
• examples of good practices
• who the bad guys are (yes, they are named in the podcast).

Your action takeaways from Mary, Jaime and me

As an HR/reward professional:

This episode relates to corporation tax-dodging, but the same thinking applies to income tax. The days of being ‘creative’ with remuneration packages and employee (re)locations have long gone and are being frowned upon by your stakeholders on whom your business’s existence relies. Check that all your employees are paying the right amount of tax, in the right place and at the right time.

As a business:

If you’re an organisation that is open, honest and transparent about your taxes, contact the Fair Tax Foundation to learn how to become certified.

As an investor:

Stand out from the competition by writing to your portfolio companies and asking them to pursue the Fair Tax Mark accreditation.

1.       Learn about the SDGs and consider the role that you can play to support them.

2.       Start taking action: determine your own priorities and where you can have most impact, and set ambitious sustainability targets using the Network tools.

In this episode, you will learn from Jessica about:

• the progress made on the SDGs so far
• the performance gap between actions taken by businesses and those that are needed to achieve the SDGs
• the $2.5 trillion investment gap
• how to use the SDGs in your post-pandemic recovery to build back better.

Your action takeaways from Jessica

1.       Learn about the SDGs and consider the role that you can play to support them.

2.       Start taking action: determine your own priorities and where you can have most impact, and set ambitious sustainability targets using the Network tools.

In this episode, you will learn from Ruth about:

• the employee digital trust challenge
• the concept of self-sovereign identity
• how to address the numeracy skill gap in HR.

Your action takeaways from Ruth and me

As an employee:

• Understand your employer’s pay gap reports and corresponding action plans.

As an employer:

• Remember that pay inequity is a high-risk approach that responsible investors look out for. It can damage your brand, your reputation and your ability to attract, motivate and retain talent, therefore affecting the sustainability of your business.

As an investor:

• Keep your focus on the human capital metrics of your portfolio companies and ask the right questions to stamp out pay discrimination.   

In this episode, you will learn from Philip about:

• the three principles of the Prompt Payment Code
• what happens to big businesses when they fail to pay on time
• what small businesses can do if they’re not being paid on time.

Your action takeaway:
Big businesses: Embrace your responsibility to help your small suppliers stay in business, which is important both for them and for you as a recipient of their services.

Small businesses: Ask your big customers four questions:

1.  Who am I supplying? Invoice the right entity.
2.  When am I going to get paid? Agree this in writing.
3.  How am I going to be paid? Understand your clients’ payment systems.
4.  Where is my money? If you don’t get paid on time, chase your client! 

Investors: As a responsible investor, your reputation and that of your portfolio companies is at stake if they don’t pay their small suppliers on time. Use the Prompt Payment Code as a tool in your ESG (Environmental, Social and Governance) toolkit.

In this episode, you will learn from Georgia how tumelo provides:

• employees with transparency about where their work pension is invested
• information on what companies their pension is invested in
• scheme members with a voice about sustainability issues at those companies.

Your action takeaway:
HR/pensions professionals:

Tumelo would love to hear about the challenges you encounter when engaging with pension scheme members because it helps the development of its platform.

 Investment professionals:

Tumelo provides you with data from underlying investors on how to vote on live and contentious issues on their behalf. Why not set up a free trial on the tumelo platform?

In this episode, you will learn from James about:

• Why your supply chain impacts the sustainability of your business
• How to embed your sustainability agenda into your supply chain
• What sustainable IT procurement is

Your action takeaway from James:
Audit your list of suppliers. How many provide the same products and services? Having too many can be costly, so streamline the list as necessary, using your sustainability expectations and your suppliers’ credentials as selection criteria.

In this episode, you will learn from Henicka about:

• the types of claims Acas deals with
• what happens when claims don’t go to court
• the tools available to you to facilitate interactions in the workplace.

 Your action takeaway:

Henicka has the following advice for you:

 As a manager 

Have conversations with your staff as soon as an issue comes up. Make yourself aware of your own policies and guidance and follow them. And learn from your past mistakes!

 As an employee

Raise issues with your manager early because what seems obvious to you might not have crossed their mind. Also, don’t make assumptions without knowing all the facts. There may be good reasons for the way things are, so ask questions. And lastly, as Ghandi said, “be the change you want to see in the world”. Bring a solution to the table because you might be the person with the best idea for resolving the issue at hand.

 As an HR professional

Continue speaking with your employees and managers and ask them what support they need right now.

In this episode, you will learn from Pankaj:

• about the scopes 1, 2 and 3 types of emissions
• the Greenhouse Gas Protocol standards and tools available to you to identify and quantify your emissions
• the pitfalls to avoid when linking greenhouse gas emissions reduction and incentives.

Your action takeaway:

As a business:
Consider linking your incentives to CO2 emission reductions. If you’re already doing so, well done! Don’t forget to use absolute greenhouse gas reduction metrics. Climate change and our ability to meet the 2015 Paris agreement to limit global warming to well below 2°C compared with pre-industrial levels are impacted by progress on absolute reductions – in other words, the reduction in the total amount of emissions. Some firms are focusing instead on intensity reduction, which refers to the amount of emissions compared to economic output such as the number of employees or revenue.

In this episode of the podcast, you will learn from Delilah about:

• the structure of private equity fund managers’ compensation
• the internal impact it has on private equity firms themselves
• the external impact it has on portfolio companies

Your action takeaway:

Delilah calls for:

• responsible private equity investment firms to practise what they preach by setting up profit share and equity ownership plans in their portfolio companies so that all employees can benefit from the value they generate
• private and institutional investors to demand more transparency on private equity compensation structures as part of their due diligence process. This is a very important point that we’ve made on previous podcast episodes.

In this episode of the podcast, you will learn from Manuela about:

• the various types of customer-related metrics
• what the ‘customer journey’ actually is
• the role of third-party ratings agencies in our decision-making process.

Your action takeaway:

To improve the customer experience, Manuela advises adopting the following five-point approach:

1.       Measure the customer experience.

2.       Measure the outcomes from the customer’s point of view.

3.       Determine how each part of the organisation can improve the customer experience.

4.       Measure progress over time.

5.       Put an action plan together to improve.

WHO ARE YOUR KEY WORKERS?
In this episode of the 'PAYING FOR GOOD' podcast, you will learn from Emily about the business benefits of joining the 7,000 organisations already accredited by the Living Wage foundation:
> to you as an employer, even if you’re already paying at or above the real living wage
> to your employees and customers
> to your investors.

 Your action takeaway:

Emily encourages all businesses that can afford it to pay the real living wage. Information on how to become accredited by the Living Wage Foundation, case studies and the investor toolkit are available on its website. https://www.livingwage.org.uk/

In this episode of the 'PAYING FOR GOOD' podcast, you will learn from Alexandra about:

•  the six pillars of the index methodology: justice, climate, good business, equality, skills and poverty
• the winners, movers-up and laggards in the index
•  what the winners have in common.

 Your action takeaway:

Alexandra advocates more transparent ESG disclosures and actions. Like me, she also believes that linking your sustainability agenda to your remuneration policy is a catalyst for real progress towards achieving the UN Sustainable Development Goals by 2030.

In this episode of my ‘PAYING FOR GOOD’ podcast, Charles Cotton, senior performance and reward adviser to the CIPD, and Luke Hildyard, director at the High Pay Centre, ask why the people-related metrics weighting is so low in CEO pay. Is it because:

• We can’t define the HR measures crucial to our organisation?
• We don’t have a common framework to measure them?
• We don’t have the right HR systems in place?

In this episode, you will also learn from Andy about the book the TTF published earlier this year, each of its 12 chapters related to one Finance Development Goal. I contributed to the chapter on Responsible Reward, the integration of sustainability and remuneration, and we discuss three others:

• Leadership: we want leaders with a multi-stakeholder mindset.
• Cultural reform: would there be a need for such a regulatory burden (including in remuneration) if the culture mandated for good, honest and ethical conduct?
• Purposefulness: what’s your strong reason for existence?

 Your action takeaway:

When it comes to remuneration, how can you improve the transparency of your disclosures? Think about whether you’re using the ‘commercially sensitive’ clause too liberally. Nobody wants to share their strategic targets with the competition, but what about your ESG (Environmental, Social and Governance) progress and results? Be proud to share them with the world!

In this episode of ‘PAYING FOR GOOD’, you will also learn from Caroline about:

• the PLSA stewardship and voting guidelines on executive remuneration
• the PLSA view on integrating ESG factors into incentives
• why there’s a lot of ‘noise’ around executive pay and yet little dissent when it comes to voting decisions.

Your action takeaway:

If you are a pension trustee, please share your statement of investment principles (SIP) and your implementation statement with your employees to demonstrate you’ve taken their views on board.

In this episode of ‘PAYING FOR GOOD’ with Charlene and James, you will learn about: 

•  the impact of the office on employee wellbeing and pension investments 
• the environmental impact of our collective actions as office occupants
• the BRE tools, assessment and certification programme that are available to you to create offices where people thrive

Your action takeaway:

As we see some glimmer of hope that we’ll soon find a way out of the Covid-19 pandemic, think about if and how your employees will be transitioning back to the office.

In this episode of ‘PAYING FOR GOOD’ with the Right Honourable Lord Deben, Chairman of sustainability consultancy Sancroft International, you will learn about:

• how to create a sustainability strategy
• the impact of Covid-19 on sustainability strategies and priorities
• the concept of resilience, which is crucial for navigating and embracing change.

 Your action takeaway

Just like life, your sustainability agenda is constantly changing and evolving. Panta Rhei. 

‘Face the facts,’ says Lord Deben, ‘and identify the Environmental, Social and Governance priorities in your business that need to be improved to be the business you want to be’.

In this episode of ‘PAYING FOR GOOD’, with Joe Willcox, Financial Adviser at St James’s Place, you will learn about:

• the workplace benefits that are available to you
• the crucial role of the HR team in assisting with employee financial wellbeing
• what to do once you know your numbers.

Your action takeaway

Whether you’re using a little book, a spreadsheet or an online banking app, working out your income and expenses is the starting point. And if someone else oversees budgeting in your household, get involved so that you too know and understand your numbers.

You are not alone. Help is available.

In this episode of ‘PAYING FOR GOOD’, you will learn from Caroline:

• the role of incentives in long-term thinking and business strategy
• whether a long-term orientation does create value
• how firms link social and environmental performance targets to compensation, and the pitfalls to avoid.

My question to you this week is: ‘Which stakeholders will you focus on and how will you reflect your approach in your remuneration strategy?’

In this episode of ‘PAYING FOR GOOD’, you will learn from George about the ICGN’s:

• guidance on executive remuneration
• global stewardship and corporate governance principles
• viewpoint on Covid-19 and executive remuneration.

 Your action takeaways

  For remuneration professionals:

In the current environment of a global health crisis and the massive job losses that come with it, be mindful of the general consensus that inflated executive pay packages will not be supported by institutional investors.

 For corporate governance professionals:

In this episode of my ‘PAYING FOR GOOD’ podcast, you will learn from our special guest Evan Davidge, ‘The Wellbeing Leader’, about:

• the different types of employee wellbeing
• how your wellbeing strategy is an opportunity to differentiate yourself as an employer of choice
• the pitfalls to avoid when creating your wellbeing strategy.

Your action takeaway

In this episode of my ‘PAYING FOR GOOD’ podcast, you will also learn from Leon about: 

• the current trends in ESG data
• the complexity of ESG reporting and frameworks
• what would make a big difference to streamline ESG standards and assessments.

Your action takeaway

When I speak to firms and engage with them, in the vast majority of cases I see good intentions to comply with regulatory requirements and to volunteer information to demonstrate their commitment to sustainability and transparent remuneration. However, these disclosures are compiled by different teams that don’t necessarily work together. All too often, this leads to disjointed reporting, which has an impact on your story.

I would like to encourage you and your sustainability and HR/remuneration teams to start an ongoing dialogue and to understand each other’s agendas so that when you ‘Tell’ your story to your stakeholders they get what you stand for, what matters to you and where you’re at with your priorities.

In this episode of my ‘PAYING FOR GOOD’ podcast, you will learn:

• the prerequisites of a Responsible Reward strategy
• the five steps to tie remuneration and sustainability
• how to start thinking beyond paying for strategy.

Your action takeaway

Our special guests Seymour and Blair encourage you to follow up this episode by reading their materials and urging your boards to incorporate the topic of Responsible Reward in their discussions.

In this episode of my PAYING FOR GOOD podcast, you’ll learn:

• What employees are likely to do when they better understand where and how their pension is invested.

• How to adapt your organisation’s pensions messaging so that pensions become today’s concern to solve local and global sustainability goals as opposed to a hypothetical life in a distant future.

• About the ‘Make My Money Matter’ campaign calling for ‘pensions with intention’ to build a better world. It’s spearheaded by Richard Curtis, the famous screenwriter, and it’s for you whether you’re an employee, employer or investor.

Your action takeaway

After listening to this episode, Caroline would like to encourage you to support the ‘Make My Money Matter’ campaign in one of the following ways:

• If you’re employee, demand a pension to be proud of from your employer.
• If you’re an employer, align your pension with your purpose and values, in line with Responsible Reward principles.
• If you’re an investor, put people and planet alongside profits.

In this episode of my PAYING FOR GOOD podcast, Nigel Marriott, Chartered Statistician, and I discuss this and the following:

• Typical errors organisations make when submitting their Gender Pay Gap data
• Will we ever be able to close the Gender Pay Gap?
• What are the potential implications of Covid-19 on the Gender Pay Gap?

Your action takeaway

After listening to this episode, Nigel would like to encourage you to calculate your Gender Pay Gap, compare your result year on year and also compare it with other firms e.g. competitors or local employers.

This is the penultimate episode of this first series of the PAYING FOR GOOD podcast. 

Useful links:

https://marriott-stats.com/nigels-blog/

In this episode of my PAYING FOR GOOD podcast, Ken Hunter, Internal Communication Specialist, and I discuss this and the following:

• What exactly is Employee Engagement?
• What’s the magic number we are all chasing?
• How can teams effectively communicate when they no longer share the same physical space?

Your action takeaway

In this episode of my "PAYING FOR GOOD" podcast, Stephen Jefford ex Human Resources Director at the Phoenix Group and I discuss the following:

• How the Phoenix Group links their purpose, values and remuneration policy
• How they have made their values significant and meaningful and come to life
• HR learnings from the current COVID-19 situation