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Could you define reputational gain. The scenario: Non Executive

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Could you define reputational gain. The scenario: Non Executive member of a Board offered to provide support for a non profit organisation they were involved with (social enterprise) - it was interpreted as conflict of interest, and reputational gain.

As I have not had Board conflict of interest training, what is this please?
Thank you for your question. Reputational gain is not something I have heard of in a legal context. I wonder if you are talking about passing off i.e. trading off the back of some one else's reputation. If you can give me a little more explanation I may be able to assist you.

Is it suggested that you as a non exec are using that position to benefit another organisation i.e. the non - profit and if so in what context?
Customer: replied 4 years ago.

This is in a medical committee context.


We follow the Nolan Principles.


The principles state that no material gain should be derived from the non executive position.


 


The person involved runs a company. They also co-founded a social enterprise with a colleague and their respective companies fund and service the social enterprise.


 


The non executive offered to provide specialist support for the organisation and contacted the chief operating officer and provided an example of what they had offered to another similar organisation. This was not to solicit work, it was to offer support. It appears that this was perceived as offering to same to the chief operating officer, which it as far as I understand not what was intended.


 


The chief operating officer felt that this was conflict of interest and an internal investigation commenced. I became aware of this. Whilst the outcome of the investigation did confirm that the non executive was not soliciting for work, it was nevertheless stated that the complaint made against them for offering to provide this support derived reputational gain.


 


Therefore the person has been advised that they were wrong to have done this and the complaint against them upheld.


 


I am not clear what this means and as I have been the supporter for the non executive, I feel that I should understand more fully what gain of reputation by offering support entails.


 


Does this help?


 


 

Could you clarify exactly what the conduct complained about was? Are you saying that the NED offered his non profit , the support of the organisation he is NED of and then went to the COO and asked for that support ? Or are you saying that the NED offered the services of the non-profit to the COO so he was seen to be promoting them? Who was supposed to get the reputational gain the NED?

Customer: replied 4 years ago.

The latter the NED offered the services of the social enterprise. The COO felt that this was conflict and the outcome was - that it was, and the reason that it constituted reputational gain.

Frankly I am surprised. The core issue is normally disclosure. I cannot see why a non exec cannot introduce the services of another organisation as long as there is a clear disclosure about the position and the non exec does not vote on any proposal and makes it clear. What principle of Nolan is supposed to have been offended?

Do I assume all those involved are public servants? I cannot see this would be an issue in a commercial organisation. I am struggling to see who is supposed to have achieved reputational gain or how.

To be blunt it sounds as if there is some other agenda underlying this. How was the investigation conducted? Was the NED represented? Does he have a right of appeal?

Customer: replied 4 years ago.

They are all public servants.


 


The person offering the service has been accused of seeking to derive reputational gain by the offer of support.


 


The investigation was conducted over the telephone with the person concerned by a clinical governance member of staff. The decision was ratified by a lead in the organisation.


 


The person accused has been advised that they have to undergo conflict of interest training and that if they do not do so, they will not be able to continued in their role.


The accused person feels very upset by this as the offer was made with the concern of the NHS at heart and not to derive any such benefit, which is what they understand a social enterprise to be.


I am also not clear about reputational gain here - who derived it.


 


I think that the accused person could appeal but feels that it will continue to be a detractor to them. I thought that a legal letter perhaps might have supported them if one cannot be clear about the gain to reputation that they were likely to have gained if the services were used.


In this case they were not of course.


 


In essence I think they want the right to defend their actions and with a legal viewpoint.

It sounds frankly a complete nonsense and I can see from the NED's point of view pretty unacceptable. I also see that this could escalate. I would however challenge the entire process. A telephone interview is not the the appropriate way to deal with such a matter and if the non exec is to be subject to a serious allegation of impropriety it should be dealt with proper due process by the board. I would write objecting to the process, question what principal of Nolan has been offended and require a proper explanation of what the alleged gain to reputation is. I am sure you could get a lawyer to do it although that will escalate the matter further.

In a commercial / corporate world corporate governance requires that non execs have access to the chairman or a senior non exec to deal with such issues . Is there no such similar mechanisms on these boards?
Customer: replied 4 years ago.

The person concerned raised it with the Board Chair and it was then escalated elsewhere.


 


Do you think it would be worthwhile challenging this legally as I know that my colleague does, but I do not want this person to cause more upset to themself if this is not the way to go?

If it has been through the board Chair and escalated elsewhere than no I would not recommend a legal challenge unless there is more at stake that having to undertake conflict of interest training which whilst irritating is no more than that. Litigation is expensive and if he wanted to challenge it he ought to resign or stand down because the challenge is to the Board if it has been through the Chair.

if your colleague feels strongly enough about the slight then he should just resign rather than put himself through a legal dispute which is very stressful.

Customer: replied 4 years ago.

That is helpful advice as the person concerned is already doing that, but is still left with this horrid feeling that they have been accused of something serious, but cannot see what reputation they might have gained and the conflict of interest in Nolan.

Well perhaps they can put them on the spot and ask for a clear written explanation.
Customer: replied 4 years ago.

That is a very good idea and one that I will share with my colleague.


 


Thank you for your support with this matter that I feel we can conclude now as neither of us can get to the issue of defining reputational gain.

Well I hope you achieve a positive outcome. It always seems to me that the Public sector is riven with these sort of problems which either do not occur at all in the commercial world or are dealt with in a rather more brutal fashion. I.e. nonexecs are hired and fired by the shareholders not generally the internal management.
Good luck with this.
Customer: replied 4 years ago.

If only the public sector could be fair to one another and rather more open and transparent.


 


Many thanks once again and best wishes to you for Easter.


Janette

Thank you Janette. Have nice Easter. I hope the issue is resolved satisfactorily.
Customer: replied 4 years ago.

Just wished to feedback to you that the person concerned met with Board members yesterday - apparently this was a very uncomfortable meeting in which a NED and the Board member who suggested contact with the COO were present.


 


They stated that the matter had to be placed before the Board, the Board would need to be made fully aware that as they see it reputational gain was sought, the investigation outcome and the action taken. That the Board would have to consider if they believed that Trust in my colleague was possible going forward.


 


It was put to my colleague that training was necessary for them as an individual. However, it was suggested that my colleague should take 24 hours to consider their position. When my colleague asked if they wished a resignation - this was not responded to, other than asking my colleague to reflect upon the matter.


 


I believe that this is what is what they require to protect the reputation of the organisation, but leaves my colleague feeling very unhappy to do this, as the actions that were taken, were in good faith and meant to support patient care and serve patients - and were not meant to be self serving.


 


What do you think - resignation, inevitable?

Did your colleague challenge what the alleged gain was or what principal of Nolan has been broken? It sounds as if the are trying to bully him into resigning without saying so. I would call their bluff and say that the whole thing is unacceptable and require a proper written explanation of what the alleged gain is and why it offends Nolan.
Customer: replied 4 years ago.

My colleague asked the questions that you suggested should be raised. The response was that my colleague should have known what principal had been offended, and moved swiftly on.


Apparently the lay member NED was particularly offensive and stated that my colleague should know and fully understand the Nolan Principles. The matter of training was raised and dismissed as the lay member felt that anyone appointed to the Board should have been aware of reputational gain.


Clearly my colleague was not intending any gain financial or otherwise, just seeking to offer additional support and free resources.


 


I think that the matter of the investigation finding was very quickly dismissed - except that my colleague felt that a 'public vilification' felt heavy handed, particularly when two other members were forced into resignation for business irregularities and nothing was said, other than the fact that they had resigned.


 


My colleague felt betrayed as the colleague who has suggested contact with the COO was chairing the meeting, and denied understanding what my colleague was offering...... Says it all really.


 


A very succinct email was sent last night (very reluctantly) in which my colleague stated that in light of the lack of support and attitude toward my colleague that they no longer wished to serve and CCG. A response is awaited with next steps.


 


I know that my colleague feels that the whole management of this case has been poor. That the investigation outcome was for additional training, and that this could have been achieved with the minimum of knowledge of other Board members. I also think that there is a feeling that the medical professionals ganged up on my colleague who is like me a nurse, and that there was another agenda at play here.


 


All in all I think that being bullied into resignation is the overall feeling, and they have achieved their aim.


 


It would be really interesting to have guidelines on what to write in the resignation letter as these matters really need to be exposed as I feel as does my colleague that this was handled insensitively from the outset, something that the internal investigation found to be the case.

That is unfortunate. Your colleague should have pressed them. It is not about knowing what Nolan says but asking or clear specifics of the allegation.
There are no guidelines on writing resignation letters. Unless you plan to publish it , it will simply get put in a file somewhere. Long letters of resignation bemoaning treatment etc simply go to the people responsible for the treatment and achieve nothing. If you want to say anything I would simply say that the NED has been accused of misconduct without proper justification or particulars and it is clear they do not want genuine independent directors.
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Customer: replied 4 years ago.

Thank you once again and I believe now that my colleague is going to walk away and will in fact add what you have said in a letter of reflection to the organisation.


 


Many thanks.