/C Suite still struggling to understand their organisation’s culture

C Suite still struggling to understand their organisation’s culture

A new Board Briefing published by the Institute of Business Ethics (IBE) following a survey has given some interesting insights into which information boards currently receive, how they consider it and how they report on culture to the outside world.

In Culture Indicators: understanding corporate behaviour, Peter Montagnon – IBE’s Associate Director and author of the report – analyses the survey data and draws on interviews with directors and those that advise them to provide practical and tangible assistance for boards in how to understand the corporate culture of their organisations.

A positive finding is that boards do discuss culture and receive a lot of relevant information – 82% of respondents to the IBE survey said their boards monitored data related to culture.

Yet the survey also suggests that boards appear to pay relatively little attention to some issues that might provide important insights on culture, including customer complaints, supply chain data (including payment terms and grievances), social media records and exit interviews.

Two fifths of boards do not receive information on customer satisfaction, while only 20% receive data on the supply chain relationship.

Some of the headline conclusions are:

  • Boards should select critical indicators based on the expectations of key stakeholders to create a dashboard of information relevant to their company and their corporate culture. “Boards are rightly worried about being drowned in information,” says Montagnon.
  • Boards need a variety of sources of information when considering culture and draw their data from a variety of sources – including HR, internal audit and compliance.
  • The best indicators are forward looking ones – leading rather than lagging indicators which will sharpen boards’ understanding of risk.
    “For example, when they consider health and safety, boards need to be sure they look not just at accidents that have happened but at ‘near misses’. Even if no harm was done, they are an indicator of future risk,” suggests Montagnon.
  • Boards need to get out and about within the company to test how culture is being embedded within the organisation.

“It is important to join up the dots. A company whose staff, suppliers and customers are all broadly happy is likely to have a robust culture. But if even if only one of these groups is unhappy, the risk of ethical problems is high,” concludes Montagnon.

Philippa Foster Back CBE, IBE’s Director said:

“What companies report on culture will carry little weight if it is not seen to be authentic. This Board Briefing gives boards the tools so they can ensure that they are not only getting the right data they need to assess culture, but are asking the right questions so they can interpret it and report on it with confidence.”

Senior Editor Lisa Baker is the owner of Need to See it Publishing Group, providing contract news for business and news sites across the UK.