January 07, 2009

Update: Standard & Poor's Appoints Ombuds

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.


  1. With Grove's background, it looks like he may come in with a watchdog mindset. Maybe he'll be a classical ombudsman rather than an organizational. We still haven't seen how S & P has defined the position and may be leaving it up to Grove.

  2. How does Grove's background fit into being an Ombuds? This is parallel to Eric Lindros being the Ombuds for the NHLPA. Why not give them more appropriate titles, such as what the previous commentor stated - Chief Watchdog Officer or Chief Concussion Officer (in Lindros' case). Seems that some organizations do not have any idea what today's Ombuds do what skill set is needed.

  3. Based on Grove's 2003 compensation information, looks like he must have needed the money to take one of the most prestigious new ombudsman jobs on the market.


  4. Interesting comments. I happen to think that in today's day and age, organizational ombudsmen may have an important "watchdog" function through the system of organizational critical self-analysis, providing feedback, and making recommendations for change. Certain industries, e.g., investment banking, are under immense pressure to have genuine self-monitoring systems in place, and the organizational ombudsman office fits in nicely to that end. Most publicly-held corporations have every reason under the blue sky to subscribe to such a system to reflect at least a good faith attempt towards more ethical practices and a genuine effort towards good governance. --Indu Sen