Corporate and workplace culture have become important themes in recent times, whether in academic circles, amongst regulators or in the broader press. But what does it mean for your business? Is there a single standard "right culture"? How can you engage staff to instill the appropriate culture in your business?
Regulators, the press and stakeholders have focused on allegations of "bad culture" within businesses in recent times. There is no single "right culture" for all businesses. Identifying the appropriate culture should start by understanding the drivers and behaviours that a business wants to promote and the risks it needs to mitigate, and then implementing this through staff at all levels. Our corporate and workplace culture team can guide you through this area of growing importance.
Be clear on corporate culture
5 questions to ask yourself
What is the right culture for our business and our workplace?
There is no single correct culture to suit all businesses. Factors which will affect a business's culture will include its appetite for risk, its preference for process over discretion and its emphasis on individual decision- making. However, there is increasing pressure from the press, stakeholders, regulators and staff to maintain a culture of diversity and inclusion, freedom from harassment and oppressive behaviours (#metoo), remuneration that doesn't encourage bad behaviour and a culture that allows staff to speak up. Businesses should consider whether the approach by staff to these issues is consistent with what it considers the right culture.
How do we embed culture in our business and workforce?
Whereas setting the right "tone from the top" is crucial, senior management should ask itself whether its day-to-day expectations reflect that tone. Moreover, even if the tone from the top is right, staff decisions are more often affected by the attitudes of their immediate line management. How does senior management instill the right behaviours in middle-management, via incentivisation or otherwise, and filter that down to staff of all levels?
Can policies and procedures play a role?
Having appropriate policies and procedures is important, but this alone is unlikely to promote the right culture. Training and awareness raising, as well as ownership (in some cases by a board member) and observation of principles in practice – including speaking up when these are breached – also play a role. Monitoring the effectiveness of policies and procedures within a business can be a good way to find out if a culture shift is working.
Good culture requires decisions being made in difficult cases that are consistent with the values that the business wants to promote.
What are the consequences of poor culture?
Having a poor culture can lead to serious consequences for a business. At the risk management level, it can lead to legal, regulatory, PR and internal management risks. It can lead to poor mental health and disengagement amongst staff, and a loss of key talent, with consequential business loss. More generally, it can simply result in poor business decision-making.
Who is interested?
We have seen numerous parties take a keen interest in culture in recent years (including the press, shareholders, external stakeholders e.g. clients and regulators). A number of regulators have spoken up about wrong-doing related to workplace culture and we expect the trend to gather momentum.