Principled Performance: the what, why and how

OCEG is a nonprofit think tank that helps organizations achieve objectives, address uncertainty and act with integrity. OCEG labels its approach: Principled Performance.

But what exactly is Principled Performance? Why should your company pursue it? And if so, how do you become an organization that practices Principled Performance?

Going beyond mission, vision and values
Most organizations have mission and vision statements, along with values they strive to abide by. A mission statement describes why an organization exists and its driving force. Life is Good’s mission, for example, is to spread the power of optimism. A vision statement describes where the company or the world would be as a result of the company’s service. Bill Gate’s famous vision of a computer on every desk in every home comes to mind. Core values like honesty, trust and passion are used by organizations to define how every employee should conduct themselves.

Mission and vision statements and values are designed to serve as guideposts but are often put to the test during day-to-day decision-making. A leader might not act with integrity when seeing dollar signs. Business concerns can overshadow principles at critical moments.

That’s where Principled Performance can help by more closely aligning principles (mission, vision, values) with company performance. OCEG’s GRC Illustrated articulates this connection in a series of illustrated posters. Text reads:

“Leaders must align an organization’s objectives to its defined mission, vision and values but that is not enough to guarantee success. Objectives and strategies also must be based on consideration of the business environment within which the organization operates and the internal culture regarding governance, risk, workforce and ethical conduct. Management of risk and compliance must align with performance objectives. Start by establishing alignment so that you set, maintain and achieve appropriate goals while addressing uncertainty and acting with integrity.”

Only by fusing principles with performance can an organization stay true to its mission, vision and values while subscribing to the daily requirements of the profit motive.

Why principled performance matters
Much has been written about business ethics and the need for leaders to act with integrity. Ethics directly relate to short and long-term profitability. In our risk management circles, reputation risk, the potential loss to financial capital, social capital and market or customer share, is a serious matter that you must account for. Organizations that lose sight of their principles can pay dearly.

One example is the 2010 Gulf oil spill, a major black eye for British Petroleum (BP) due to the environmental damage caused by the oil disaster in the Gulf of Mexico. Class action lawsuits and millions boycotting BP gas stations occurred after the disaster. Closer to the present, tech companies like Google and Facebook are being fined for data breaches and under public scrutiny over how they are protecting user data. Every incident erodes trust and chips away at a company’s reputation.

Organizations today need to consider both the court of law and the court of public opinion. A compliance failure or a data breach not only can lead to fines by regulators, but it can also upset customers who take to social media to express their displeasure. Principles and profits are equally important for organizations appealing to socially conscious consumers.

Principled performance reflects the symbiotic relationship between principles and performance. OCEG deserves credit for seeing the contradiction of organizations believing one way and acting out another way.

The pathway to principled performance
OCEG’s illustration, Pathway to Principled Performance, gives organizations a detailed map that shows the journey to principled performance, and all you encounter along the way. It points to the need for capabilities, systems and a pathway.

Capabilities are multi-purpose tools that you can leverage with governance, management and audit systems. The key is when a capability is improved, it’s also a system-wide improvement. Governance, management, audit and more benefit from the across-the-board gain.

Systems that operationalize governance, management and audit functions serve as the backbone of the organization. You can have the capability, but you need a system to efficiency roll it out. Systems give you scalability and can leverage automation that can grant your business a digital advantage.

The organization encounters change, threats, opportunities and more along the way to meeting objectives. Capabilities and systems help manage risk, perform compliance and empower leaders to make strategic decisions within ethical boundaries. This puts you on the pathway to principled performance in the day-to-day business world.

That’s the what, why and how of OCEG’s Principled Performance. There is much more to it than what you’ve read here. Visit the OCEG website to watch webinars and download content that dives deeper into Principled Performance.

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