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Company Culture

27 August 2019 by Kerry Round

Company Culture

In order to attract the best candidates the values of an organisation are more crucial than ever before

I have come to understand that a job interview is a two-way process. That actually, just because an organisation has invited me for an interview and I liked the look of the job spec, it does not mean that it is either the role or the company for me. The kind of company, its values, its culture and indeed those of the department that I would be entering, have escalated in their significance.

As employers, we often discuss whether the candidate is the right ‘fit’ for the team, but how often does the candidate ask whether the team is the right ‘fit’ for them?

A potential employer may ask any manner of questions such as your sickness record but how comfortable would you be to ask what mental health support the organisation offers or whether health MOTs are offered to employees? It might be a contractual condition that you may be required to work from a number of different office or site locations however would you feel confident to ask if working from home would be an option for you too? This might be particularly important to you if you have a medical condition or predisposition or you have children or perhaps you have a disabled partner or parent to care for.

How often at an interview have you been offered and accepted an invitation to look around the office you would be sat in? Have you thought whether you would be happy moving from your own office to an open plan office where you touched shoulders with your colleagues? How often have you asked in an interview whether there are kitchen facilities for the workforce or whether complementary refreshments were on offer? Are any of these things important to you?

In 2016, the FRC conducted a study in the UK which explored the relationship between corporate culture and long-term business success. Sir Winfried Boschoff, Chairman of the FRC, said in his report that “A healthy culture both protects and generates value. It is therefore important to have a continuous focus on culture, rather than wait for a crisis”.

The Essence of Culture

It’s not easy to define. It can be something you feel. We could say that culture can be described as the organisation’s vision, values, norms, systems, symbols, language, assumptions. It’s “the way things are done around here”, it’s a shared assumption as to appropriate behaviour. It can make a company unique, it’s the attitudes displayed, the repetitive habits, the behaviours, the beliefs.

In its 2018 incarnation, the Corporate Governance Code put ‘culture’ firmly at the foot of the board of directors. Principle B states that the board should “establish the company’s purpose, values and strategy, and satisfy itself that these and its culture are aligned. All directors must act with integrity, must lead by example and promote the desired culture.” The Wates principles mirror the importance of culture and company success and states that for large private companies “An effective board develops and promotes the purpose of a company, and ensures that its values, strategy and culture align with that purpose”. Of course, neither say what that ‘desired culture’ should look like.

I’m impressed by the significance that has been placed on this intangible, immeasurable [idea] but I’m also slightly disappointed that it even has to be said. It seems fundamental that if you treat your workers well, this will lead to a better culture and a better outcome for the organisation as a whole.

I don’t think there is a reluctance to comply or apply with these principles nor a deliberate attempt to ignore them but I do think the very notion is so abstract that it’s actually very difficult to even know where to start.

As the founder of a start up, I have been clear on the culture I want to create and the values my company will uphold. It’s not a difficult job when you can count your employees and associates on one hand. However, when you have a workforce in the tens of thousands, spread over several sites in potentially several jurisdictions, when you’ve had employees for five, ten, 20 or more years and the culture has naturally been set, can those ten directors in the boardroom really be responsible for making a cultural shift for the better? There can be no quick wins or quick changes or short cuts and there has to be a common recognition and belief and trust in the Code and the Wates Principles that the company’s purpose must be aligned with the desired culture.

Next Steps

First things first, the board needs to really know what its purpose is. It needs to know what the company values are and concurrently it must think about what culture it desires. If the organisation is lucky, the desired culture is already in place.

Trickier still, the board must find out what culture the company actually has, how does it do this? Well, it could use cultural indicators such as staff turnover figures. It could look at staff appraisals and exit interviews. If not already done so, it may order a staff questionnaire – beware the dangers of asking the workforce to complete such a questionnaire but not appropriately or adequately feed the results back to them. Under the Code the board must now take direct responsibility for the Whistleblowing policy giving the workforce a voice and anonymously if required. This will give indications as to the cultural climate. The board could leave the board table and mingle amongst the staff. Look at the office environment, question the accessibility of the leadership and question whether there is a company-wide bonus structure.

Generating Value

I am going to perform better and therefore achieve more for the organisation I work for if I experience job satisfaction. If I can take pride in my job and the work that I do both in silo and with my team, I am going to ensure that time after time I give the best of my working self to my role. If I feel appreciated, and valued and if I know that my technical expertise and experience are respected, I’m going to ensure the job gets done. If I am treated as a grown up and trusted then my loyalty is guaranteed.

Of course none of us go to work for the love alone, pay and benefits are important and if we see our leaders being rewarded handsomely with bonus schemes or pay incentives or pay increases whilst we as the general workforce are not, it is human nature that this will lead to unrest and will chip away at our loyalty and our motivation particularly if our efforts throughout the year have meant compromises for ourselves and our family or social lives.

The Code also places huge emphasis on stakeholder engagement and specifically workforce engagement and with it specified mechanisms for doing so. I suspect the most commonly adopted approach will be the snappily titled ‘Designated Non-Executive Director for workforce engagement’. I hope that with this role comes not only accessibility to the board but more importantly nurtures a real relationship between the board and the workforce. Only time will tell the true impact the DNED will have but I am scanning report and accounts and corporate websites daily to see evidence of the impact.

Flexible Working

I sniggered, yes sniggered, when a younger friend said with a completely straight face and with not a hint of sarcasm that she ‘would only consider a job offer if it came with the flexibility to work from home’. How bold I thought, how unrealistic, how naïve of my friend to think that the professional world works in that way. Who turned out to be the naïve one?

If a board has to actively consider the culture of a company, if it has to be told that it must be conscious of and step outside of the board room to walk amongst its workforce, if it has to be told explicitly that it should assess and monitor culture and where it is not satisfied it should seek assurance that management has taken corrective action – how would I judge such a board? If the Remuneration Committee has to be told that when setting the remuneration of the executive, it should consider the pay of the workforce, then does that organisation have a culture that a newcomer would want to join?

Without question, this cannot be a task for the board alone, it requires support and interaction from senior management and cascading down. Leading from the top, actions rather than words. Above all, you have to know where you are going in order to get there.

At the time of writing, MP Helen Whately had just introduced a flexible working bill in Parliament. If it succeeds, flexible working is to be weaved into the fabric of our working world. Employers could
be forced to make all job roles flexible by default, rather than putting the onus on employees to request flexibility.

Rather than draw breath and think how impossible this will be to put into practice, let’s embrace it and work out how it can be achieved, keeping valuable knowledge and experience within the company, reducing the gender pay gap and promoting a positive culture which can only lead to a more successful and profitable company. 

Kerry Round is Founding Director at Round Governance Services Limited

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