We are forever counselling companies who want to achieve change to look to their performance management systems. After all, ‘what gets measured gets managed’. Now that employees have grown used to appraisal systems, they’ve also learned how to play these systems, and there’s no point in hoping for new behaviours if people are not going to be rewarded for displaying them.
By the same token, there is no point in expecting companies to change unless you change their performance management regime, i.e., accounting standards (the performance management process) and the analysts (the appraiser). This is a good start, but in HR terms this will be as naught unless the staff member is supported in their new behaviour by their boss. For the Board, the boss is the group of shareholders who provide the financial backing for the company and to whom the company through the Board is ultimately answerable. While one could argue that change can be achieved merely with the Board’s buy-in, I would say that this is true if only the staff are to be required to change. However, if the whole organisation needs to change, the shareholders must require their Board to change too, if there is to be real transformation. This is particularly important in view of the slippery nature of this accountability, being generally dispersed amongst a wide community of investors, which provides ample scope for Boards to divide and rule. There is a need for a proxy then, A critical mass. A Change Champion. Perhaps pension funds are elegantly placed to fill this niche. Having the largest concentrated stake in many of the world’s largest corporations, and already starting to find their lobbying feet, pension funds have the added attraction of being increasingly required by law to take a more prudent longer term view that some of their get-rich-quick fellow shareholders. It is poetic that the organisations who we rely on to look after us in old age might also look after us in our working lives by assuming this paternal role.