Despite the crisis devastating many financial services companies, Standard & Poor's has made good on its promise to create an Ombuds program. In a press release today, The McGraw-Hill Companies has announced that Ray Groves, the former chairman and CEO of Ernst & Young, will become S&P's first Ombuds, effective February 16, 2009. Groves will report outside of the S&P business units to Harold McGraw III, chairman, president and chief executive officer of The McGraw-Hill Companies, S&P's parent company, and will have accountability to the Audit Committee of McGraw-Hill's Board of Directors to provide an independent review of issues and concerns. (McGraw-Hill Press Release; CFO.com; Bloomberg.)
When prominent organizations decide to hire an Ombuds in response to public pressure, there are two models. The organizations choose either a seasoned Ombuds from outside the industry or a respected industry insider with little or no Ombuds experience. The first category is exemplified by the United Nations' choice of John Barkat and Alliance Bernstein's hiring of Jan Schoenauer. These Ombuds must learn the culture of the organization and industry, but can fall back on their existing Ombuds skills.
The alternative model was followed by the Red Cross, which hired Beverly Ortega Babers, and the Washington, DC Public Schools, which chose Tonya Vidal Kinlow. These new Ombuds are familiar with the setting, but must learn new skills and reestablish their new identity. Either way, these high profile Ombuds face a learning curve and the microscope.
Related posts: S&P to Hire Ombuds; Standard & Poor's Reiterates Commitment to Opening Ombuds Office.