Balancing on a Tightrope: Customer Relational Capital, Value Creation and Disclosure

This paper documents and compares the perceptions of key functional specialists regarding the contribution of 16 customer relational capital components to value creation and the motivations underlying its external disclosure. Findings of questionnaire surveys to samples of UK listed company marketing directors (who create customer relational capital) and finance directors (who report customer relational capital) are supplemented by follow-up interviews. Marketing directors and finance directors broadly agreed on the relevant importance of the components to value creation. While companies attempted to internally collate information on those components of most value creation importance, there was a lack of correlation between perceived value creation importance and the extent of external disclosure. This suggests that external disclosure is a poor proxy for value creation importance. In terms of disclosure incentives, marketing directors prioritise trust creation among a range of stakeholders whereas finance directors take a more share holder-centric perspective. External disclosure attracts new customers and informs other stakeholders, yet may adversely affect relationships with existing customers and/or breach specific non-disclosure agreements or generic industry restrictions and regulations. Harming competitive position is considered the major disclosure disincentive. In the view of marketing directors, managing the external disclosure of relational capital is akin to balancing on a tightrope.

Austerity and financial governance: a UK case study of the National Health Service

Purpose – This research concerns the issue of financial governance within the UK NHS and aims to assess the effectiveness of existing financial governance arrangements in the main providers of health services in the UK. Also considered is the importance of good financial governance in a time of financial austerity. Design/methodology/approach – The primary research for this project was based on the use of a questionnaire to all finance directors in NHSTs in England supported by semi-structured interviews with: finance directors, non-executive directors, executive directors and senior finance staff. Findings – Among the main findings of the study were: certain financial management systems were not prioritised in line with what is seen as good practice; existing financial management systems were not always seen as adequate for the achievement of good financial governance; there was sometimes a lack of understanding of financial issues by non-executive directors; and the complexity of the NHS funding process often resulted in opaqueness of the financial risks. Research limitations/implications – The research is limited by the relatively small coverage of NHS trusts but this has been compensated for by a series of in-depth interviews with key stakeholders in the governance process. Practical implications – Weaknesses in financial governance could result in further scandals which result in loss of life and poor patient care. Originality/value – There are many papers on the issue of governance in the public sector in general and the NHS in particular. However, there is little published on the issue of financial governance in the NHS. Also of great value is the emphasis on strengthening financial governance in an era of austerity