A look behind the scenes

Over many years, the NSI has developed a series of checks concerning the suitability of persons to own or operate a security company. These aren’t just those you would expect to see in BS 7858 – and which everyone must pass – but a set of tough additional criteria listed under the heading ‘Repute of Management’.

On the surface, it would seem obvious that we do not want ‘bad hats’ to get their hands on UK security companies, but it isn’t (a subject which we’ll discuss in due course).

The essence of the ‘Repute of Management’ clause is that a person with an unspent criminal history (or who has been disciplined under the Companies Act) should not generally be allowed to manage a company. Customers must be protected from such people at all costs, and as such the NSI logo necessarily has to convey a high degree of confidence and reassurance in this area. Thus we operate a series of stringent checks which determine the credentials of applicants.

Checks working in practice

There are some good examples of how those checks work in practice. For instance, we received an application from a company whose governance structure seemed overly complex. Digging into statutory records, we discovered that the ownership of said company lay not with its so-called directors but with a holding company operating three levels up. The holding company had been established offshore. The ultimate director was, in effect, a tax exile… and with good reason. He was a disqualified director.

One of the methods he was using to develop his business interests was to establish these complex, long-arm arrangements in which numerous enterprises could operate. At this point, we were able to bring our ‘Repute of Management’ clause into operation and terminate this individual’s application.

There are many features of this particular case which bear examination. First, there was the enormous amount of research needed to unearth the facts and the painstaking, grinding work that was required. Then there was the way in which the rules have been written, so that when we eventually did have all the facts at our disposal we were able to act on them and stop the process.

Third, and very tellingly, our processes were sufficient to prevent this individual from operating in the NSI… but how many other enterprises was he controlling, without any checks at all, in other industries?

Organisation of companies

The next example illustrates how the ‘nose’ of a good investigator, developed over many years, can make such a difference. We received an application which, in time, resulted in an initial visit. At that visit, our inspector asked for clarification on the organisation chart and relating back to several process flows in the quality manual. He explained that he could see no logical reason why the company was organised in a particular way, given the manner in which it conducted its business.

The essence of the ‘Repute of Management’ clause is that a person with an unspent criminal history (or who has been disciplined under the Companies Act) should not generally be allowed to manage a company. Customers must be protected from such people at all costs

There was so much stonewalling that eventually our inspector asked to see the managing director and explained that he believed there was somebody (or bodies) missing in the logical operational process, since the job descriptions and the actual work that needed to be done didn’t stack up. The managing director concerned disagreed, and stated that this was how the company operated. He then challenged our inspector to accept his application.

Without missing a beat, the NSI inspector then asked to see the company payroll. Lo-and-behold, there was one more name on the payroll than the organisation chart. This person was responsible for the area which had most concerned our inspector. However, matters were to become even more interesting. The person on the payroll was a director of the company, and had an unspent criminal conviction for a violent crime. Over the next few weeks he resigned as a director (thus falling back on BS 7858) and transferred his interest to his wife.

However, over many years, the NSI’s rules have been fine-tuned to anticipate such a move. They enable us to consider whether such a person or any member of his/her household could be a director in such circumstances. So if he had transferred his interest to his son, daughter or mistress, our rules would still have come into play.

Customers can be intimidated

The third example is, sadly, very serious but not uncommon in certain areas of the country. An applicant company was rumoured to be controlled by unsavoury characters, and had gained a reputation for intimidating customers into purchasing its services.

We heard about this through our informal networks, and protracted investigation provided evidence that we were dealing with a serious problem (but that no tangible evidence of law breaking existed).

The NSI commissioned a highly reputable private investigator to gather evidence that would then inform our decisions. The evidence was damning, and gave us enough information to deny the application. This was a lengthy, complex and very expensive process which has involved significant legal costs to the NSI, using up a large proportion of our ‘not-for-profit’ profit for a year. The gain has been that we’ve been able to keep these people away from the customers of NSI-approved companies, while protecting the reputation of those firms.

I’ll leave you with two overriding thoughts. The first is that, without an organisation offering the experience, credibility and sheer determination of the NSI (which has been developed over many years, of course), the industry’s clients would be prey to more criminals and ‘bad hats’. How many other industry sectors in the UK have a body like ours which exacts such painstaking standards, at considerable expense to itself?

The second thought is that all of the companies I’ve cited as examples here still operate in the UK security industry under the aegis of other certification bodies.