London, 20 July 2016 – ICSA: The Governance Institute welcomes the FRC’s Corporate Culture and the Role of Boards report, which ably demonstrates the importance that culture and good governance play in delivering long-term business and economic success.
‘I am delighted that the FRC reports recognises the integral role that governance plays in supporting corporate culture,’ says Peter Swabey, Policy and Research Director at ICSA: The Governance Institute. ‘We firmly believe that culture starts at the top and that if boards promote strong governance and good practice throughout the business as well as in the boardroom, culture becomes properly embedded.
‘Our biannual Boardroom Bellwether survey has shown an increase in the number of companies actively addressing culture and behaviour on the board, up from 64% in summer 2015 to 82% this summer. We have also seen an increase in the number of companies addressing culture and behaviour in the wider organisation (up from 70% in summer 2015 to 75% in summer 2016), although more needs to be done to ensure that the culture is filtering all the way down from the top. One way of doing this could be to connect purpose and strategy to culture, and to align values and incentives, as the FRC suggests.
‘Given the unprecedented level of mistrust in business that we have seen in recent years it is essential that companies recognise that stakeholders are looking for openness and integrity and that a strong, accountable culture can produce genuine business benefits. Governance is vital to this.’
Chris Hodge, Policy Adviser at ICSA adds: ‘This important report makes it very clear that addressing corporate culture cannot be viewed by boards as a one-off or annual exercise. It is something that requires their constant vigilance. Their company’s long-term viability and reputation depends on it.’
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