Supply Chain Conversation #3: Supply chain labour governance and certification.

conversation-3-_22119259_5e71cc57f3ba272e61ac1c66d01c5d2482cb9abcRCSA’s CEO, Charles Cameron, has been posing a number of questions about supply chains for me, lately. In this series of Supply Chain Conversations, we explore the involvement of recruitment and workforce services firms in supply chain operations.

Our third conversation reveals how certification of workforce services providers, who exercise good stewardship over their service value networks, can contribute to better supply chain labour governance and trigger a collaborative “race to the top” that harnesses the power to convert a supply chain, one link at a time.

CHARLES: RCSA is currently developing a certification program to make it easier to make clean and ethical workforce services buying decisions which, in turn, will force change in the market by ensuring unethical and non-compliant providers don’t win work.  This program incorporates the concept of a ‘service network’, where workforce services providers are part of a ‘service network’ and have to use their control or influence to enhance supply chain labour governance.  Can you explain how this would work? Continue reading

Reclaiming the Power of Self-Regulation in the Employment Services Industry.

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In the Future of Work, the employment services industry must reclaim its power of self-regulation.

It’s not about setting up sympathetic hierarchies to make soft-edged rules for the commercial comfort of “the Regulated” – as some industry detractors want us to believe.

It’s about using relational resources that can be discovered at the positive core of the industry to nurture response-ability[1]the ability to choose and to act as effective and ethical agents in multi-actor employment services transactions.

And it might require us to take a new look at what we think we know about the compliance education and compliance activity upon which we’ve been dependent to date.

How might we begin that process? 

I’ve been having an engaging conversation with Lisa O’Hara of Exclusive Migration about non-compliance, compliance education, and self-regulation. It was triggered by a provocative comment from work futurist, Jeremy Scrivens, who has been tweeting:

“The opposite of non-compliance in the future of work is not compliance; but self-regulation.”

Enticing – but not much to work with until you go deeper. So, I followed up on Jeremy Scrivens’ writings and discovered what I think is gold in his article, We Can’t Get On Together with Suspicious Minds (Love that title!). Here’s an extract…

 

We are living at a time when there has never been more compliance and regulation in organisational life and it is killing the joy, adventure, wonder and passion in our work. Everywhere I go, I hear from people that they want to spend more time on the bigger, life issue for working, which is to contribute something meaningful and less time on the ‘paperwork’ and compliance aspects of work. People are crying out to be engaged in more meaning, more contribution and less compliance.

Please don’t get me wrong; I am not saying that we don’t need checks and balances in our organisations to ensure that we are ‘safe’ and secure across the board; what I am saying is that we need to restore the balance and change the order of the questions. Rather than safety first, let’s put adventure first. Rather than compliance first, let’s look at how we can experience more contribution and meaning.

Jeremy went on to quote Dov Seidman in Forbes Magazine:

‘Most companies today are committing a fundamental mistake: they are “doing” compliance –the U.S. spent $29.8 billion on compliance activities in 2010 according to a study from AMR Research – but they are not “getting” more compliance. The frequency of compliance violations is increasing rather than diminishing and the impacts of non-compliance in a more interconnected and interdependent world are much more dramatic.

According to Jeremy, Seidman says that:

“…we need to experience a shift in organisations from one of compliance and risk to a new focus on fostering a positive culture which emphasis ethical behaviours and innovation, not compliance.”

Having spent the last 18 months or more designing a code for assisted self-regulation of the employment services industry, comments like these were always going to capture my attention.

What had also captured my attention was a submission to the Queensland Labour Hire Inquiry along lines which suggested that, in order to achieve compliance with already existing statutory regulation, perhaps all that is needed is more education about compliance.

There are several reasons why I think we’re going to need more than that.

The first is that education is not always a good predictor of compliance; and in my experience, it’s the already-mostly-compliant, who turn out for the education!

Moreover, compliance education is often too narrowly targeted at a single point of agency in the interplay of multiple actors, who are in a position to affect real outcomes – it is directed to employers, or to employment services providers, or to consumers; rather than being designed to build understanding and promote collaborative action simultaneously from multiple parties’ perspectives, stories and experience. There are, of course, exceptions … but, in the manner of exceptions, they are exceptional!

Additionally, much of the compliance education currently on offer is problem-centered. It’s scary stuff! And I’d be the first to admit that I’ve been responsible for some of it in the past. But there is a lot that we can learn from the field of appreciative inquiry, and at last I am beginning to get that:

If you focus on a problem and you design around a problem and you build actions around a problem, what you’re more likely going to get… is more of the problem.[2]

So, what do we do if we choose not to focus on the problem – bearing in mind that making  that choice might be our first step towards effective self-regulation?

I like what Peter Pula of Axiom News says about redirecting our problem-focused energy:

You feed that energy when you’re focusing on the problem. Whereas you could say, ‘What would I rather was happening?’ Paint a picture of that. ‘These are the things we would like to be experiencing. If you’d like to be experiencing these similar things, come into conversation with us and we’ll see what happens’[3].

Several things immediately fell into place.

Firstly: Industry or professional self-regulation isn’t about making do with sympathetic hierarchies & soft-edged rules; it’s about using relational resources to inform choice and to act as effective and ethical agents in multi-actor employment services transactions.

Secondly: When a profession or industry declares its commitment to high-core principles such as:

We provide an appropriate standard of service to your work seekers and customers.

We act with integrity and deal fairly.

and to outcomes such as:

We provide services that meet our customers’ proper and agreed requirements…

…it is really making statements about what it would “rather was happening”. It is redirecting what has previously been problem-focused energy towards describing and achieving positive outcomes that are consistent with values of service and fair dealing that can be discovered at its positive core.

Thirdly: When an industry or profession commits itself to collaboration with its interest-holders, it positions itself to co-produce an architecture that can supports constructive dialogue about acceptable outcomes, which make valuable contributions to the proper functioning of the labour market with which it interacts. Everyone benefits.

It is important, in seeking this new approach, that we do not reject the notion of regulatory compliance, so much as highlight the type of self-regulation that is essential to achieve the “opposite of non-compliance” – once the necessary foundational knowledge has been attained.

It therefore remains necessary to educate and equip businesses with the tools and knowledge about what the rules are and how to avoid breaking them. Beyond that, we must have the imagination to go further; because education, in the absence of an effective capacity for self-regulation, can only ever create the awareness of non-compliance. For it is the ability to self-regulate – to make the right choices – that will advance the industry beyond the state of non-compliance, which many presently assert characterizes it.

As each new story about labour market exploitation and non-compliance appears on a current affairs program (or in a public inquiry)  doing damage to the employment services industry’s social licence, the awareness of non-compliance increases and we are reminded of the need for the industry to reclaim its power of self-regulation.

Many firms already exercise that ability on a daily basis. They lead by example. They are to be commended for it. What is necessary to take the next step in reclaiming the power of self-regulation is for the industry to engage its interest holders in the co-production of statements of acceptable business outcomes that make valuable contributions to the proper functioning of the labour market.

There is now an important conversation to be had; and I hope you might join it.

 

Andrew C. Wood

 

[1] Stephen Covey’s expression describing the ability to choose our response to any situation.

[2] Co Creating Generative Conversations in Community, Axiom News (2016) http://axiomnews.com/co-creating-generative-space-community  

[3] Co Creating Generative Conversations in Community, Axiom News (2016) http://axiomnews.com/co-creating-generative-space-community   

Tackling Labour Market Exploitation: Are industry and regulatory codes of conduct sufficient?

Of course not! It would be naive as to suggest that they are. Nevertheless, they are vital to the success of a comprehensive strategy in tackling labour market exploitation. Three characteristics of labour market exploitation suggest reasons why that is so. Continue reading

“You must act with integrity.” Say again?

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I was fascinated recently to come across a principle for the regulation of professional services that said simply, “You must act with integrity”.

It caused me to wonder if a professional conduct principle that was so broadly stated could ever be of much use. I guess it all depends on how well-attuned the profession already is to the requirement; and on the extent to which “integrity” is already understood as a standard of normative behavior, wound round by stories about the circumstances in which the standard was met and, perhaps more importantly, by stories about when it wasn’t.

The principle is one of the key regulatory provisions administered a body no less august than the Solicitors Regulatory Authority for England and Wales. Of course it is not the sole provision; and is only part of the foundation upon which the regulation of solicitors is now built in that jurisdiction. You will have to make up your own mind about whether it contributes to a solid foundation; but it did cause me to wonder how the principle might transpose in other regulatory settings – especially where the intent was to regulate professions (and emerging professions) that are people-focused, strongly relational, and which rely upon the ability to develop and sustain significant levels of trust. Yes, the private employment services profession came to mind; and it seemed to me that, in its more commercial context, we might take more from a compound principle such as, integrity and good faith.

So imagine that you were regulated by a principle that said, “You must act with integrity and good faith”. What would it require of you? Could you relate to those requirements? Could you build a coherent appreciation of what it might require of you? Let’s have a closer look at what Australian courts might think.

Integrity & Good Faith are terms that are often not defined; but they can be described and are easily understood by reference to their opposites – trickery and sharp practice.

In one recent case, the Full Court of the Federal Court of Australia observed:

Trickery and sharp practice impede commerce by decreasing trust and increasing risk. Good faith and fair dealing promote commerce by supporting the central conception and basal foundation of commerce: a requisite degree of trust. Business people understand these things.

“Business people understand these things”. I liked that!

In that case, various over-limit, late payment and dishonour fees charged by a bank were challenged as being unconscionable in contravention of the Australian Securities and Investments Commission Act 2001. In the course of evaluating whether the bank’s conduct was unconscionable, the court had to consider whether the parties had acted in good faith. The court eventually found that there was “no basis to conclude that, against [the bank’s customers], or generally, the [fees] were unfair or the transactions unjust”.

Special leave has been granted to the bank’s customers to appeal to the High Court and what follows might not be the final word on the topic of good faith. Nevertheless, the following statements of general principle are helpful in understanding the scope of the integrity and good faith requirement as it presently understood in an Australian commercial and consumer context.

The working through of what a modern Australian commercial, business or trade conscience contains and requires, in both consumer and business contexts, will take its inspiration and formative direction from the nation’s legal heritage in Equity and the common law, and from modern social and commercial legal values identified by Australian Parliaments and courts.

…It does not involve personal intuitive assertion. It is an evaluation which must be reasoned and enunciated by reference to the values and norms recognised by the text, structure and context of the legislation, and made against an assessment of all connected circumstances. The evaluation includes:

  • a recognition of the deep and abiding requirement of honesty in behaviour;
  • a rejection of trickery or sharp practice;
  • fairness when dealing with consumers;
  • the central importance of the faithful performance of bargains and promises freely made;
  • the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage;
  • a recognition that inequality of bargaining power can (but not always) be used in a way that is contrary to fair dealing or conscience;
  • the importance of a reasonable degree of certainty in commercial transactions;
  • the reversibility of enrichments unjustly received;
  • the importance of behaviour in a business and consumer context that exhibits good faith and fair dealing; and
  • the conduct of an equitable and certain judicial system that is not a harbour for idiosyncratic or personal moral judgment and exercise of power and discretion based thereon.

Now if the requirement to act “with integrity and good faith” can be made to mean all that, perhaps the principle can provide a solid foundation and the regulatory challenges presently facing the employment services industry are not so much about setting up licensing schemes, as finding out what can be agreed and built on that foundation. I guess we will have to wait and see.

Andrew C. Wood