The Co-op Bank - Has it Rediscovered its Ethical Compass?
Is the Co-operative bank spending £5.5 million on CSR window dressing or reasserting a genuine ethical integrity?
2013 was something of an ‘annus horribilis’ for UK’s Co-operative Bank, perhaps one of the worst since they began in 1872. Although the vast majority of the headlines and problems were specifically with The Co-operative Bank, the whole Co-operative group was undoubtedly affected by association. The bank posted a colossal £2.5bn loss for 2013, creating significant consumer doubt in the brand and even the stability of the long established organisation. It seemed one of the last bastions of ethical integrity in the financial world had succumbed to the lurid corrupting forces of money and power. First came the eleventh-hour-runaway-bride stunt that saw the bank pull out of a deal to buy Lloyds TSB branches. Then came the shocking revelations about the conduct of their chairman and ordained Methodist minister Paul Flowers, buying Class A drugs, earning him the nickname the ‘crystal methodist’. The very stability of a financial institution, their reputation and consumer trust was devastatingly eroded.
But like the British Royal Family’s 1992, a year rocked by scandal and broken promises, the bank seems to be once again getting its house in order, emerging from a horrific year with a new zest for life and business. Launching a multi-million pound advertising campaign, the bank aims to rebuild trust in its genuine ethics and values using a savvy new approach to their image and brand projection. But is this just CSR window dressing or is there significant substance to these stylised statements of integrity?
Brand assurance is undoubtedly at the core of their focus in this latest effort to revive its reputation. But for any company, brand assurance must be deeper than the graphic design and cinematography of a great new campaign. Being who you say you are in business is as important for individuals as it is for whole corporations. When the integrity of individuals, whether they are the chairman or the receptionist, is compromised - the brand risk is substantial. Similarly, issues of ethical compromise in a business supply chain, in product sourcing or production can be equally damaging.
With the continued growth in ethical consumerism (the Co-operative’s own research has, somewhat ironically, charted this rise), the need for Assurance extends well beyond basic risk mitigation and managing the conversation in your PR, into the tangible everyday products and services a company offers. This is particularly true of consumer driven sectors such as retail and hospitality where consumer demands increasingly reach beyond quality and cost into seeking assurance on the environmental and social story behind the product and brand. Get it right and you manage risk and deliver commercial advantage. Commercial entities that ignore this market change are both losing out by missing the opportunity to steal a march on competition, but also they risk pariah status if they do not at least meet minimum standards in their supply chain, working ethos and service offering. When we look at The Co-operative Bank as an example, it’s safe to say that brand assurance matters. It is to be ignored at your own commercial and reputational peril.
It seems The Co-operative Bank is indeed on the right road back to recovery and are taking significant and considered steps in their process of assurance and ‘corporate healing’. The bank have had a thorough ‘going over’ by the Financial Conduct Authority who have now approved a major governance restructure. They have instigated a complete change of their board and a reduction in the numbers on that board from 18 to 11 members, with three of these seats being nominated by Co-operative members and the rest remaining independent. The board will be held to account by a wider council of 100 members who will ensure the bank remains true to its ethical value and charter.
The bank have stated their commitment to re-establishing their unique and ethical dominance in the financial services industry, assuring existing and potential customers that their values and ethics will be what shapes the way they do business and what they offer their customers in the future. It seems that the ‘Co-operative House’ is once again in order.
That is good news for the banking industry and for consumers who desperately need integral models of ethical business and service to engage with and purchase from. It will take time for the bank to hold its head high again, but their reparative trajectory of change has all the hallmarks of the founding values and ethical morality on which the company was founded and operated for so long. Lessons seem to have been learnt and more rigorous and less-corruptible governance and infrastructure has been established.
So it is right that The Co-operative Bank should shout about their ethics and values, that they should unveil their metaphorical corporate tattoo showing their lifelong commitment to a better way of doing a business and ethical banking. The internal changes they have made and extensive brand assurance efforts they have instigated have earned them the right to the outer promotion of an inner cleansing. It seems they are once again doing business for ‘all the right reasons’.
Ethical Goods can help you understand more about brand assurance and how it applies to your business. To make contact go to www.ethical-goods.com