Principled Performance

Principled Performance: the what, why and how

Mike Ogden
July 15, 2019

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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 writtenabout 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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