Strategic HR Analysing culture
CanHRmeasure up?
New reporting requirements have been introduced around
monitoring culture more closely. JENNY ROPER asks if this will
improve corporate governance or be just another box to tick
“Rob is the miserable one of the
partner Emeritus professor of
organisational behaviour at London
Business School Rob Goffee (who,
poor man, is not on the phone call to
defend himself).
But despite Jones’ opening quip it is
he who is foretelling doom. “Here’s a
miserable prediction: in light of the
new corporate governance reporting
guidelines boards will be saying to their
HR departments ‘WE NEED SOME
MEASURES!’” the former BBC
director of HR and internal
communications says, shouting this
last part down the phone so loudly that
those nearby in HR magazine’s office
look round in surprise.
Jones is referring to the Financial
Reporting Council (FRC)’s Corporate
Governance Code, published in July
2018 and containing new provisions
requiring boards to ‘assess and monitor
culture’, and ‘seek assurance that
management has taken corrective
action’ in cases where it is ‘not satisfied
that policy practices or behaviour
throughout the business are aligned
with the company’s purpose,
values and strategy’ – with
the board’s activities and
any action taken in this
area explained in the
annual report.
The fact that this is a new
code rather than a revision
(as has been more typical)
is significant in terms of
how much more central
culture and other related
concepts such as values
and engagement
now are.
“Culture I think got
one reference in the old
code; it might even have been in the
preface,” muses Simon Lowe, a
consultant at Grant Thornton and
chairman of its Governance Institute.
“Now it’s in the first section and then
the provisions… so now rather than it
being an ephemeral concept it’s seen as
at the heart of business.”
This means the concept is making its
way much more solidly into the
boardroom – something that hasn’t
historically been the case, reports chair
of Advanced Boardroom Excellence
Helen Pitcher. “There are certain
boards that when I’ve said to them:
‘what’s your cultural oversight?’ they
say: ‘we don’t get involved in that, we
leave that to the subsidiary company’,”
she reports.
“I say: ‘how do you know that’s
happening in your subsidiary?’ They
say: ‘we get an occasional map from
HR’. I say: ‘and how much time does
that get on the agenda?’ They say:
‘20 minutes towards the end’, so you
know damn well it won’t get even
20 minutes…”
The FRC code is not the only new
guidance aimed at tackling this.
Culture has now been included in the
Chartered Institute of Internal
Auditors’ guidelines. And at the end of
Now
partnership,” jokes visiting
professor and executive in residence
at IE Business School Gareth Jones,
referring to his book- and articlewriting
culture is
seen as
at the
heart of
business
last year new guidance was
released from GC100 on the
section 172(1)(a) to (f) duty
within its Companies Act
2006, explaining the link
between good stakeholder
engagement and a healthy
corporate culture.
The end of 2018 also saw
the release of the Wates
Principles, which largely
mirror the
Corporate
Governance
Code but widen
its reach to all
large private
16 HR November 2019 hrmagazine.co.uk
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