Successfully Embedding Corporate Culture
Successfully Embedding Corporate Culture
In January, the FRC issued new guidance to all Boards (Provision 2) to include the requirement that boards should not only assess and monitor culture, but also how the desired culture has been embedded. The FRC guidance states “To have an impact on behavioural outcomes and influence the way business is done, culture and values need to be embedded throughout the organisation. Empowered middle managers are key to successful embedding. Boards will need periodic assurance from management – either conducted internally or externally, that it has effectively embedded those components in operational policies and practices.” This may seem at first glance a “minor” update, explaining the need to embed corporate culture! This is a significant shift and challenge for leaders. Some Boards may never have sought assurance that the Values and Culture are embedded across their operations.
Who is responsible for Corporate Culture?
In my experience a key challenge organisations face is in identifying who “owns” the responsibility of culture? This is not a straightforward answer but responding “everyone” is also not helpful. In most organisations, elements of culture are led by a variety of teams/functions for example; Purpose may sit within the strategy or Company Secretariat, Values may sit within HR, and Behaviours may be shared with Ethics and Compliance and HR, but what is clear is that the Board is accountable.
Culture, integrity and diversity are central to the Corporate Governance Code. Principle B requires boards to establish a corporate purpose, values, and business strategy, and ensure they are aligned with culture. A ‘positive’ working culture, one based on transparency, trust, respect and inclusion, supports better organisational resilience and performance.
How do we define corporate culture?
We define culture as “the way we do things and behave around here”.
- Culture needs to align to the organisation’s strategy and purpose.
- Culture is influenced by leaders’ actions and behaviours.
- Culture is shaped by employee behaviours ad those that are rewarded and tolerated.
- Culture is sustained through symbols, stories and shared beliefs.
- Culture is impacted by the organisation’s environment systems and processes.
Culture impacts business performance and sustainability, standard of compliance, employee motivation and wellbeing.
How confident are you to report on how embedded your desired culture is from January 2025?
- Have you defined the culture and shared values you need to deliver your strategy and purpose?
- Do you know how to embed your desired culture effectively?
- Is your culture enabling your commercial success?
- Do you measure if the culture and values are being embedded effectively?
If you have answered no to any of these questions, please get in touch and we can help you to turn your responses to yes.
Our culture team with expertise in Behavioural Science, in partnership with Telos Partners our strategic partner, can support your culture journey, through assistance with:
- Culture definition and strategy
- Culture assessment and deep dives
- Culture change, embedding and transformation.
For further information, please contact Darriane Garrett.
Download the below for further information on the services we provide for Corporate Culture.