Pay attention to your corporate governance policies

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As governments increase their focus on driving societal and economic changes through procurement, your organisation’s corporate governance policies and approach to corporate social responsibility are becoming an important component of preparing government bid documents.

If you have ever responded to, or even read through, a government request for tender or proposal (RFT or RFP), you’ll be aware that they all include questions about the respondents’ corporate governance policies.

Depending on the nature of the business and the goods/services being purchased, government departments and agencies have traditionally wanted to understand how respondents manage core compliance requirements such as quality management, OH&S/WHS, risk and environmental responsibility.

In recent months and years, the scope of these questions has expanded dramatically to encompass a much broader range of policies that drive ‘corporate social responsibility’ (CSR).

corporate governance policies
Corporate governance policies help drive corporate social responsibility

In Victoria, these policies (including those around environmental sustainability) are now grouped under the Victorian Government’s Social Procurement Framework, launched in September 2018. (For an overview of the framework, see our post.)

Social procurement is defined in the Victorian Social Procurement Framework as organisations using their buying power to generate social value above and beyond the value of the goods or services being procured. The framework encompasses a broad spectrum of corporate governance matters around CSR that organisations need to consider in addition to the traditional quality management, risk and OH&S/WHS. The federal and other state governments have similar frameworks.

In this article we’ll explore some of the corporate governance policies that you are likely to see in current government RFTs. But firstly, some thoughts on why it is so important, when responding to a government RFT, that you’re able to articulate your organisation’s corporate governance policies.

Four reasons why corporate policy is important

Compliance

It’s easy to simply think of the corporate governance part of the response as a ‘tick in the box’; that is, something you have to do to get into the race. It is certainly true that compliance is a very important element of any tender response, and for that reason alone you need to have your corporate governance policies clearly documented. But to think of corporate policy only in this light is to miss an important tender response trick.

Differentiation

Your corporate governance policies, if clearly, thoroughly and thoughtfully articulated, can do so much more than simply get you over the compliance line. They can be a valuable tool for differentiation, showing how you set yourself apart from the competition. If you can find ways to cover more than just the bare minimum, take a new and fresh approach, you will find that your policies can become marketing, as well as operational, tools.

Value Add

Your corporate governance policies may also become a source of ‘value add’ – the seam of gold in any RFP response. Government is looking for someone who can not only do the job, but who can bring something extra. That something extra, for example, may be an alignment with the department/agency principles and/or objectives. The way to show this is by having corporate governance policies that align with their policies, and which will help them achieve their broader goals, as well as the outcome of the specific project for which you are bidding.

Building a better business

Corporate governance services should not simply be lip service. If well thought out, and consistently and conscientiously applied, they will add value to your overall business, helping you to be a better corporate citizen, member of the local business community and employer.

Corporate governance policies – the expanding scope

As mentioned, federal, state and many local governments have published frameworks or strategies around social procurement – outlining how they plan to use their purchasing power to help bring about the societal and economic changes that they want to drive. These strategies and policies are then reflected in their procurement documents – EOIs, RFIs, RFTs and RFPs.

This means respondents’ corporate governance policies in areas surrounding corporate social responsibility have become an important part of the evaluation and selection criteria.

As a result, the scope of questions around corporate policy has expanded considerably. Of course, quality, environmental management, risk and OH&S remain important, but they are now part of a much broader range of questions. As an example, corporate governance policy questions we’ve encountered in government tenders over the last year have included:

  • Sustainability – in economic and social, as well as environmental terms
  • Equal opportunity/fair treatment in the workplace – including Workplace Gender Equality Agency (WGEA) letter of compliance
  • Domestic violence leave
  • Prevention of modern slavery/human trafficking
  • Support for indigenous businesses
  • Support for small and medium enterprises (SMEs)
  • Support for regionally based businesses
  • Local content/local industry development
  • Employment and training for disadvantaged Australians – particularly recent migrants, the long-term unemployed and public housing tenants
  • Incorporating Australian Disability Enterprises into the supply chain
  • Employment of people with a disability
  • Corporate social responsibility – including sponsorships and corporate volunteering
  • Quality
  • Risk management
  • Disaster recovery/incident management
  • Environmental management

The majority of the above are encompassed by Victoria’s Social Procurement Framework. While not every one of these policies is going to be requested in every RFP, you can be certain that this focus on corporate policy is not going to lessen. It is, and is likely to remain, a key evaluation criterion for government procurement decision-making.

So what do you need to do?

For organisations wanting to win business with Government, the most important thing to do is think about these policies sooner rather than later.

Waiting until you receive the RFT, and then trying to formulate policy in the heat of the response period, is not likely to lead to the best thought-out policies. Take a little time now to research the published strategies of the government(s) with which you want to engage, and prioritise your policies in line with their key focus areas.

Your policies do not have to be War and Peace. A policy does not have to contain all the detail of how you will do something; it is about your stated intentions – the high-level overview and who has responsibility for implementation.

Developing and adhering to corporate governance policies are so much more than just a tick in the box. They will help your organisation stand out and show value, making you attractive to Government in a bid response. Above all, they are the right thing to do, helping to make you a better business and a better employer.

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