Baker Hughes to Create Ombuds Program

The S&P 100 oilfield services company based in Houston will create an Ombuds program with the hiring of three new positions for the Organizational Ombuds Office ("o3"): o3 Principal/Ombuds, o3 Connection Specialist, and Ombuds. The first two positions will operate from Houston and the third will be based in Calgary, Canada. 

First Report From Standard & Poor's Ombuds Raises Questions About Usage

S&P's Ombudsman, Ray J. Groves has published the first annual report summarizing the activities of his office. The report does not provide the total number of cases handled in 2009, but says that 85% were from external sources; 85% were from the U.S.; 50% concerned S&P's ratings; and only 12.5% requested anonymity.

New Securities Industry Ombuds to Address Annual Policy Conference

On April 28, Joseph P. Borg, the Ombuds for the North American Securities Administrators Association, will host an open meeting at the Annual Public Policy Conference in Washington, DC. Borg was appointed to the position in December 2008, and is also Director of the Alabama Securities Commission. The NASAA Ombuds program serves as a neutral forum for the securities industry representatives and works to open channels of communication and to foster relationships with securities industry representatives. Ombuds programs are becoming a fixture in the financial services industry, and NASAA's Ombuds will surely have many issues to discuss. (NASAA Annual Public Policy Conf. Info.; NASAA Ombuds Page.)

Related posts: SEC Affirms Role of NASD Ombuds; NASDAQ and Banking Lobby Endorse Ombuds for Accounting Oversight; FDIC Ombuds Issues Biannual Report; Mortgage Crisis Draws in Ombuds; Office of Thrift Supervision Ombuds Hiring Scores of Special Assistants; Canadian Banking Ombuds Releases Year-End Review; S&P Launches Ombuds Office; Details Still Scarce.

S&P Launches Ombuds Office; Details Still Scarce

The website for the new Standard & Poor’s Ombudsman went live yesterday. The homepage explains:

At S&P, our Ombudsman will listen to issues and concerns and ensure that all channels within the Company to resolve those issues have been effectively utilized. Although not every issue or concern can be resolved to the satisfaction of all parties, the processes to be followed by the Office of the Ombudsman will offer a balanced and independent approach to resolution.

There is no indication that the S&P Ombuds program is designed in compliance with IOA, USOA or any other standards of practice. (S&P Ombuds.)

Prior posts: S&P to Hire Ombuds; Standard & Poor's Appoints Ombuds.

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.

Job Posting: Apollo Group

The S&P 500, for-profit educational corporation is seeking an Associate Ombuds for its Phoenix headquarters. Applicants must have five years of relevant experience in a corporate or university setting. The position pays $55,000-60,000 per year. No closing date indicated. (Apollo Group Posting.)

Standard & Poor's Reiterates Commitment to Opening Ombuds Office

In testimony before the House Committee on Oversight and Government Reform on October 22, S&P's President Deven Sharma confirmed the company's decision to establish an Office of the Ombudsman as one of many initiatives is increase transparency and quality. A progress report from S&P on "steps to further manage potential conflicts of interest, strengthen the ratings process, and better serve the markets" leads with news of the Ombuds program:

Establish an Office of the Ombudsman that will address concerns related to potential conflicts of interest and analytical and governance processes that are raised by issuers, investors, employees and other market participants across Standard & Poor's Ratings Services ("S&P") businesses. The Ombudsman will have oversight over the handling of all issues, with authority to escalate all unresolved matters, as necessary, to the CEO of McGraw-Hill and the Audit Committee of the Board of Directors.

The company says that it has "begun a search for candidates and will appoint an Ombudsman by year-end." (MarketWatch; S&P Progress Report.

10/23/08 Update: NY Times reports that S&P "has established an ombudsman office."

Prior posts: S&P to Hire Ombuds; S&P Promises Ombuds by Year-End.

Update: S&P Promises Ombuds by Year-End

Standard and Poor's has issued a progress report on its plans to enhance independence, strengthen the ratings process and increase transparency. These actions include establishing an Office of the Ombudsman. The financial services and publishing company says that it has begun a search for candidates and will appoint an Ombuds by the end of the year. (S&P Press Release.)

Prior post: S&P to Hire Ombuds.

If true, the search for candidates has been stealthy. The position hasn't been posted on any of the typical websites. A more public search would be consistent with the objective of transparency and be more likely to yield a qualified independent candidate.

S&P to Hire Ombuds

Standard & Poor's, the financial services and publishing company, announced changes to bolster confidence in credit markets and the firm's analytical integrity. A highlight of the plan is the establishment of an Ombuds to address concerns about transparency and potential conflicts of interest in the rating process as well as analytical and governance processes that market participants may raise. (Wall Street Journal; Bloomberg; RTT News.)

Market pressures are pushing the financial services industry to become more responsive, transparent and ethical. These forces will certainly create additional opportunities for Organizational Ombuds. The announcement by S&P is just the latest example of the trend. (See these related posts: Job Posting at Merrill Lynch; SEC Affirms Role of NASD Ombuds; Lawyers Advised Wall Street Journal Owners to Hire Internal Ombuds; NASDAQ and Banking Lobby Endorse Ombuds for Accounting Oversight.) It would also seem that financial institutions are (or should be) reassured by existing Ombuds programs at Alliance Bernstein, American Express, The Hartford, Putnam, Royal Bank of Canada, ScotiaBank, and TD Bank Financial Group.