The City Values Forum and Tomorrow’s Company are publishing a guide following the newly publish Report on Corporate Culture and the Role of Boards by the Financial Reporting Council (FRC).
The guide is 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 organisation. 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 look s like and how it is delivered.”
Commenting on the guide, Richard Sermon, Chairman of the City Values Forum said:
“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.”
While boards recognise the importance of culture, many still find it an intangible and difficult topic to address in terms of assessment, accountability and assurance. To help address this issue the FRC brought together the Chartered Institute of Management Accountants (CIMA), the City Values Forum (CVF), the Chartered Institute of Personnel and Development (CIPD), the Institute of Business Ethics (IBE) and the Chartered Institute of Internal Auditors (IIA) to form a Culture Coalition to highlight good practice and promote the importance of a healthy corporate culture. Their outputs are designed to make it easier for boards to get to grips with culture and properly to fulfil their duties of accountability and assurance.
Building on their earlier work on Governing Values (2013) , the City Values Forum and Tomorrow’s Company have developed Governing Culture: Risk and Opportunity? – a guide to board leadership in purpose, values and culture, a practical guide for those boards seeking to define, assess, monitor, nurture and develop the culture of their organisation.
About the City Values Forum
The City Values Forum works to embed the principles of trust and integrity in the financial and business services communities and the corporate sector and to improve cultures and behaviours. Formed in 2011 to deliver the recommendations of The Lord Mayor’s Initiative ‘Restoring Trust in the City’, the Forum is constituted as an informal working grou p reporting to The Lord Mayor. The City Values Forum continues to work across a broad front with City institutions, corporate entities, regulators, professional and trade bodies, think tanks and academic institutions to strengthen standards of integrity in the City and corporate communities.
Our latest work, Governing Culture: Risk and Opportunity ? – a guide to board leadership in purpose, values and culture is the latest in an occasional series of initiatives addressing standards of corporate governance, professional competence and the development and sharing of best practice – each aimed at improving business culture and behaviour. No single initiative can remedy the failures of integrity revealed in recent years, but by acting with the support of many organisations, working throughout the financial, business services and corporate sectors, we aim to reassert the City’s long – standing reputation for fair dealing and to encourage the development of healthy business cultures and behaviours in UK corporate life.
If we succeed together we will inspire customers and clients to entrust us with their business and earn society’s endorsement of our economic role.
About Tomorrow’s Company
Tomorrow’s Company is a London – based globally focused agenda – setting not – for profit think tank whose purpose is to inspire and enable companies to be a force for good. It champions a practical agenda for better leadership, governance and investor stewardship. Tomorrow’s Company believes that adopting an approach that focuses on purpose, values, relationships and the long term is the key to enduring business success.
It promotes this approach by engaging business leaders, investors, policymakers and NGOs in a uniquely thoughtful process which sets new agendas. Tomorrow’s Company developed the concept of the business licence to operate and redefined the concept of corporate social responsibility in the 1990s. Its work on investor stewardship and capital markets stimulated the emergence of the UN Principles of Responsible Investment and the UK’s Stewardship Code. More recently it has championed integrated reporting and a new agenda for governance and stewardship. It has significantly influenced the direction of corporate governance, including defining the inclusive duties of directors for the UK’s Companies Act 2006 and influencing the King III report in South Africa.