Boards need to get to grips with corporate culture

by Venetia Howes, City Values Forum Why should boards take culture seriously? Because getting it wrong can destroy value and even lives – think Enron, LIBOR, VW, Kids Company, Mid-Staffordshire NHS Trust, South Yorkshire Police (Hillsborough). But getting it right, especially in turbulent times such as now, enables corporate strategy to be agile, it helps people to make the right decisions under pressure and it keeps the organisation pointed towards its purpose. There is more than just any one organisation’s reputation and success at stake. These cases add to the general mistrust of business and institutions. For the country to prosper in every sense we need healthy organisations with healthy cultures that build trust and serve the needs of society. However, some boards still find corporate culture intangible and difficult to grasp. To this end, the Financial Reporting Council (FRC) has put its weight behind the subject by publishing a Report on Corporate Culture and the Role of the Board. As a member of the FRC Culture Coalition, the City Values Forum, working with Tomorrow’s Company, has published a consultation draft of a guide to help boards deliver on their duties in this area. Governing Culture: Risk and Opportunity? – a guide to board leadership in purpose, values and culture is a practical working document aimed at board members. It draws upon research and consultations with senior chairmen, executive and non-executive board members. The guide outlines the board’s role in governing and leading culture based on assessment, alignment and assurance. It discusses the difference between the role of the board and the role of the executive team in leading and managing culture and provides practical tool-kits to help boards ask the right questions, set future direction and assess progress. Commenting on the guide, Sir Win Bischoff, Chairman of the Financial Reporting Council, said: “Culture is a critical element in the long-term success of any business. Every organisation will have its own approach to this important topic and appropriately it is not the purpose of this guide to be prescriptive as to outcomes. It does however offer a practical agenda and roadmap to help boards to assess where their organisation stands in relation to their accountability for culture, to evaluate areas for priority action and periodically to assess progress.” Is this a practical way for boards to govern culture? We seek your views and feedback on this consultation draft, Governing Culture: Risk and Opportunity? – a guide to board leadership in purpose values and culture. The guide can be downloaded from: www.cityvaluesforum.org.uk and http://www.tomorrowscompany.com/publication/governing-culture-risk-opportunity/ Whether you are a Chair, non-executive or executive director and whether your organisation is in the commercial, public or third sector, this guide is written for you. Please let us know what you think. The final version will include case studies, quotations and ‘top tips’ from business leaders; we particularly welcome more of these. The consultation period runs from Wednesday 20th July to Wednesday 7th September 2016. Comments should be sent by email to richardsermon@gryphoncorporate.com and pat@tomorrowscompany.com. Comments and suggestions received will be taken into account in the production of the final version scheduled to be available at the FRC’s Conference on Wednesday 20th September. In addition to this and the FRC’s report, other members of the FRC Culture Coalition who are publishing contributions today include the Institute of Business Ethics (IBE), The Chartered Institute of Personnel and Development (CIPD) and The Chartered Institute of Internal Auditors (IIA).