June 10, 2019
Giving a hard edge to the softer side of business: Reporting on culture and values
Organisational culture, values and purpose are all gaining acceptance as levers of business performance, and are increasingly influencing investment, purchasing and recruitment decisions.
However, despite evidence of the value of employee engagement and culture, there has not been universal commitment and investment by businesses to build capability, processes and links to business strategy.
That may, finally, be about to change. In January 2019, the revised UK Corporate Governance Code came into effect which placed culture front and centre, introducing new principles that place emphasis on the role of purpose, values and culture in running financially and socially sustainable companies.
Applying the revised code
For companies that have not focused on culture and values as levers to deliver their strategy, where to start?
First, from a practical perspective, companies will need to audit what they are currently measuring, how they report and who is responsible, to identify any gaps. From this, Boards can agree what to measure and the frequency, how to balance quantitative and qualitative indicators, how often to report and what additional skillsets may be needed at Board level to analyse the reporting.
Second, Boards need to oversee the alignment of strategy and culture, holding the executive to account and offering support. There are important roles for those in the business responsible for culture, people and ethics, and Boards should engage them closely.
Some of the keys to unlocking alignment between strategy, values and purpose are:
- Leaders with a shared vision who “walk the talk”
- A clear, consistent narrative
- Credible values that are well understood, deeply embedded in behaviours, systems and processes and that are recognised and rewarded throughout the employee experience
- Strong internal engagement linked to business strategy
- Robust measurement, reporting and action planning
- Employee voice and involvement that connects employees and employers
- Breaking down siloes and building cohesion between teams
- Non-Executive Directors with the skills and experience to challenge and direct.
The revised Code is a valuable resource for business: progressive businesses will adopt it enthusiastically.
This article is adapted from an article that appeared in the Financial Times’ 125 Monthly Bulletin.
Finsbury helps clients make the most of the opportunity that the revised Code presents with cross-disciplinary teams offering expertise in strategy, employee engagement, purpose and investor relations. To start a conversation about linking strategy and culture, contact Louisa.Moreton@Finsbury.com