Publication Governing Culture: Risk & Opportunity?

Executive Summary

Following the publication of the Report on Corporate Culture and the Role of Boards by the Financial Reporting Council (FRC), the City Values Forum and Tomorrow’s Company are publishing a guide entitled Governing Culture: Risk and Opportunity? – a guide to board leadership in purpose, values and culture.

Drawing upon practical experience, research and consultations with senior chairmen and both executive and non-executive board members the guide helps boards to determine how boards might approach the key questions like:

• What do we have to do to address this issue?
• How do we go about it?
• What does good look like?

Boards are the ultimate custodians of an organisation’s purpose, values and culture. Their role is to ensure the organisation is delivering its purpose and that the purpose, values, strategic goals and capability, including culture are aligned. Boards also need to assure themselves that the culture of the board is the desired culture and that appropriate action is taken to maintain the desired culture throughout the organization. The guide:

• highlights the difference between the role of the board and the role of the executive team in leading and managing culture
• sets out an agenda of 24 questions that boards might ask of themselves and of their executive
• offers a ‘roadmap’ to help boards assess how mature their approach is to governing culture
• includes case studies, quotations and ‘top tips’ from leaders.

Sir Win Bischoff, Chairman of the Financial Reporting Council, in a foreword to the guide writes:

“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.”

In his introduction to the guide Sir Roger Carr, Chairman of BAE Systems, comments:

“Culture should have no geographic boundaries or be subject to management interpretation. The definition of doing the right thing should never change at a border crossing or adjusted at an executive meeting. Culture should be the bedrock on which good business delivers great performance.

This guide is intended to help in identifying why culture matters, who drives the agenda, what good looks like and how it is delivered.”

Richard Sermon, Chairman of the City Values Forum commented:

“Especially in times of uncertainty business strategies will be buffeted by economic and political pressures and societal changes. A healthy culture which is aligned to purpose and defined values will serve to enhance the organisation’s relationship with its stakeholders and can act as an anchor, enabling the emergence of more agile strategies while keeping the organisation pointed towards its purpose and living its values.”

Mark Goyder, Founder and Chief Executive of Tomorrow’s Company, commented:

“For too long the high priests of shareholder value have told us that we must worship at the altar of financial analysis. Now, at last, after Enron, LIBOR, Volkswagen and others, boards and investors alike recognise that what most threatens shareholder value is to neglect the purpose, values, relationships and the human side of a business. The question is what to do about it? The answers are to be found in this very practical guide and its tool-kits.”