It’s fair to say that the blog caused a stir. Specifically some of our investors were instinctively uncomfortable with a small - or indeed any - proportion of the Fund being invested in the RateSetter marketplace. We listened carefully to this feedback and on Friday we made the decision to suspend this and immediately unwound the existing investment, which was about 0.6% of the Provision Fund. We will not use the Provision Fund in this way in future.
There are two other important things that we’ve learned from this.
Firstly, that the level of transparency we are aiming for has a real purpose. Without our proactive disclosure we wouldn’t have been aware of the concerns that some of our investors had. It would be easy to view this experience as an inconvenience and revert to the standard approach in the financial services sector, which is to provide less information, but that would be the wrong thing to do. This is the key thing: transparency builds trust and leads to positive change. We should not be deterred if it makes a business feel slightly uncomfortable in the short term – in fact this is a sign that it is working.
Secondly, it underlines the importance of communicating information to our customers along with a clear rationale in advance as opposed to after the event. It is a strength to listen to constructive feedback and respond swiftly, but the beneficial impact of transparency can be undermined by delays in communication – no one likes to be told about something after the moment has passed!
Our business and industry is increasingly in the spotlight and we welcome this. It presents a huge opportunity but with that comes responsibility, and we take both very seriously. So we put our hand up and apologise for having got things wrong on this occasion, but the responsible thing to do is to learn from it and make appropriate changes. I hope you agree that this is a good outcome and one which reflects positively on our business.