skip tocontent

ombudsman news

issue 56

September/October 2006

taking the chair

ombudsman focus on Chris Kelly, chairman of the Financial Ombudsman Service

Although he self-deprecatingly describes himself as "just a man in a suit who's been a civil servant for 30 years", when Chris Kelly - the chairman of the Financial Ombudsman Service - talks about the importance of identifying with customers, it is clear he understands the very real impact that a dispute can have on the life of both sides concerned.

We spoke to him to find out more about his views on the theory and practice of life on the board at the ombudsman service.

what attracted you to the ombudsman service-

I joined the Financial Ombudsman Service as a member of the board in 2002. I have to confess that at that stage I didn't know a great deal about it. But once I had done my 'due diligence' I thought it would be a very interesting organisation to join.

In a sense it has some similarities to the children's charity - the NSPCC - of which I am also the chairman. People think I'm mad when I say that - as obviously the ombudsman isn't a charity and doesn't deal with children. But both are well-run organisations working in difficult and challenging areas. Both are in the public eye and dealing with groups of people with very different interests.

And both organisations strive to be better. To have the opportunity to play a part in that and to help guide things is really rewarding.

you have a strong financial background - is there any reason that you ended up going down that particular path-

My background has given me some understanding of financial policy - the way the financial system works. I started off at university as a medical student. But I decided it was a mistake in the first week and changed to economics. My second degree was in social anthropology. And since then my career has been a mixture of economics and social policy.

I thought my interests would best be developed in the Civil Service. When I joined, you didn't apply direct to a particular department - you were only able to express a preference for where you'd like to go. I said I'd like the Treasury, not really expecting to get placed there. But I was and I had a wonderful time! I eventually became director of monetary policy, and subsequently the director of the budget & public finances.

I particularly enjoyed the Treasury because of the mix of economics and social policy. Social policy is essentially what much public expenditure discussion is about. I also spent two years at the Department of Social Security. The importance of the benefit structure to things like work incentives means that this was a mixture of economic and social policy as well.

does the strength of the board lie in the different backgrounds of its members-

The board is not "representative" in the sense that no board member is appointed specifically to represent any particular group of people or sector. But the board can draw on the wide range of experience, knowledge and skills that the different members bring. It makes a big difference to the quality of discussion to have people who can look at things from a different perspective.

This is also my experience as chairman of the NSPCC board. I'm essentially a man in a suit who's been a civil servant for 30 years, so it's refreshing for me to be working not just on a conceptual level, but with people who have direct professional experience of dealing with children day-to-day.

you talk about the board being able to "challenge" the executive management team - does that work-

The board takes a strategic overview of the service and ensures it is properly resourced and able to operate effectively and independently. In order to do that we need to be able to challenge the executive team - and they are commendably open and willing to be challenged.

In fact board members have said they enjoy working with the ombudsman service precisely because it's so open to discussion. That means we have a particular responsibility to resist the temptation to go further down the 'hands-on' management road. It would be easy to overstep the mark and get too involved!

is it hard to step back and not get too involved-

Yes, it is very hard. Particularly when there are people on the board with directly relevant experience - it's inevitable they would like to get more involved!

I imagine some people believe the board's work entails looking at decisions on complaints. But that's not so. That's the work of the ombudsmen. Our focus as a board is to give a strategic steer, not to intervene directly with the day-to-day management and with decision-making by our ombudsmen.

Having said that, there are strategic management issues we look at in some detail - the board needs to know there is an effective HR policy, for example. Looking at those issues is one way of doing a quick health check of the organisation. That's not interfering in individual personnel issues; it's about satisfying ourselves there are effective policies in place to support this organisation.

are there any particular challenges for the ombudsman service at the moment-

I think the big challenge facing the organisation is the uncertainty about the future workload in relation to mortgage endowment complaints. We're starting to see the volume level off - but can't predict exactly how time-barring will affect numbers of complaints.

The economies of scale involved in dealing with the three- and four-fold increases in mortgage endowment complaints in recent years helped to put downward pressure on our unit costs - though that's not the only reason.

The measures introduced to cope with the volume of complaints have undoubtedly made the organisation more efficient. A declining workload would remove that influence. So we have to ensure that we have other drivers to keep costs down.

The mortgage endowment experience has also changed the way we are seen by some sectors of the financial industry. We have to continue demonstrating that when we make decisions, it is done in an even-handed and objective way.

to be able to listen to people's views but remain independent-

Absolutely. One of the problems with a lot of organisations is that they don't really hear what their customers say.

This is probably completely irrelevant but I spent four years as a pay negotiator in the civil service. The single most important thing I learnt then about negotiation of any kind isn't rocket science. It's about listening to what the other person says, making sure you understand it, and demonstrating that you've heard it. You have to make sure you are responding to what's actually being said to you - not to what you think has been said, or what you wanted to hear!

we know that the board is keen on having external independent reviews - following the review by Professor Kempson in 2004. Why is that so important-

External reviews can be very helpful - although we also do a number of other things to assess how the organisation is doing. For example, we look at sample cases and decision letters, we get input from the independent assessor, and we get letters from MPs and complainants - which have given me quite a bit of an insight. They are normally questioning whether we are really as even-handed as we like to think!

Having an external review is a good way of getting reassurance that we are as good and as fair an organisation as we want to be. And it allows you to demonstrate it to everybody else! It's one thing for you to assert your independence, but - particularly when you don't have competition and those who pay your costs have no choice about it - it's very important to demonstrate that you have robust processes in place.

what do you feel you've achieved so far as chair - both personally and professionally-

It's been enormous fun! This is partly because it's great working with Walter Merricks and his team, and partly because I have such a strong and constructive board. People naturally have different views and different personalities, but it feels as if we're all part of the same team.

As far as achievements are concerned - one example of something I'm particularly pleased with is the process we put in place for consulting and agreeing on the corporate plan. We took advantage of the opportunity to stand back and consider our place in the world and where we might be going. Among other things, this led to the funding review and to improving our stakeholder dialogue.

was your move from board member to chairman a daunting one-

No, not at all. Of course it's hard work, but the board and I have what I hope is a justified confidence in the organisation. So I don't lose sleep over it.

Sir Christopher Kelly KCB

  • chairman of NSPCC
  • a board member of the National Consumer Council

formerly:

  • permanent secretary at the Department of Health
  • head of policy at the Department of Social Security
  • director of monetary & fiscal policy and director of the budget & public finances at HM Treasury
photo: Sir Christopher Kelly, chairman

Photo: Chris Kelly, chairman of the Financial Ombudsman Service

ombudsman news issue 56 [PDF format]

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.