It’s like
trying to
grab a bar
of soap.
Because
you don’t
know what
you’re
trying to
get your
arms
around
Analysing culture Strategic HR
“So in putting the questions
now have a working group of staff to
design that. And we as an HR team are
having conversations with lots of
people across the business all the time.
We try and check in with each other
and say ‘are you also finding this is
an issue?’”
Different functions beyond
HR should also be involved, adds
Debbie Ramsay, a director at
GoodCorporation. “We ran a session in
the Summer on measuring ethical
culture and we had good take-up from
across the organisation. So it wasn’t just
HR; it was company secretaries who
are going to have to be reporting on
this. It was general counsel… What
the Code is doing is broadening
interest across the organisation.”
Game-changing regs?
Which for Ramsay is where the Code’s
focus on ‘assessing and monitoring
culture’ will really shift the dial. It
will make HR
matters in general
much more
prominent
within
understanding the organisation’s
purpose and goals. Then the
organisation should align what it
wants its culture to be with these.”
Crucially none of this activity
should be the sole purview of HR, feels
Pitcher: “If the board isn’t involved in
setting and agreeing the culture, and
more importantly agreeing how it will
be measured in a meaningful way, it’s
like trying to grab hold of a bar of
soap. Because you don’t know what
you’re trying to get your arms around.”
This is particularly important given
that culture at board level is a critical
area in its own right – and has been a
significant contributing factor in
several of the past few years’
governance failings, says Henley
Business School’s Kakabadse.
“It’s the board that should be held
responsible for raising sensitive issues
– on bribery and corruption for
example, which is massive at the
moment… But the moment you raise
that as a board director you’re put on a
non gratum and the reality is you’ll
never work again; your name is black.
So you need to create a very robust and
resilient culture at board level.”
“Boardroom culture isn’t talked
about enough yet,” muses Foster Back.
“So are boards correctly informed? Are
they shouting up when they see
something amiss?”
“One of the things I’d be saying as an
HRD is that one of the key elements is
your CEO and senior management,”
agrees Celia Baxter, former group HRD
at Bunzl and NED at Bekaert, DS
Smith, RHIMagnesita, and Senior.
Employees should also be involved
in setting and reporting on culture,
feels Tim Scott, director of people at
Fletchers Solicitors.
“We’re just at the start of
trying something different,” he
says. “In the past we’ve relied
quite heavily on external measures,
so The Sunday Times’ Best Companies
to Work For lists and Best Companies.
What we’ve realised is it only
gives you a snapshot on one
day… and my sense with
external analysis is you don’t
own that.
organisation-wide and board-driven
activities around governance, she says.
Scarlett Brown, director of research
and policy at think tank Tomorrow’s
Company, agrees that ‘culture’ is a
helpful wrapper for all of the new
people-related elements making their
way into various governance codes and
guidance over the past year or so –
signposting boards towards specific
elements such as stakeholder
engagement and employee
representation on boards.
“What’s interesting is you could
replace the word ‘culture’ with ‘people’,
or ‘people management’ or ‘HR’ quite
easily… So anything that’s encouraging
us to talk about people and behaviour
at board level is a good thing,” she says.
“I think it connects with other aspects
of corporate governance, which are
really driving home that you as a
board need to understand your
people… so holding more town halls
with staff, having executive
responsibility for engagement…”
The question becomes, then,
whether such elements’ inclusion in
various governance codes will make
boards take responsible governance
more seriously. And will this prevent
the kinds of high-profile corporate
governance failures – from the
financial crisis in 2008 to the collapse
of Thomas Cook in September – we’ve
seen over the past few years?
When it comes to the latter question,
there are plenty who would say
probably not. “The regulators need
more teeth to tackle cultural issues
when they arise and to be more
effective in maintaining standards,”
feels the CIPD’s Houghton. “This is
where the updated Code could be
very powerful in that it’s a much
clearer declaration of culture’s
importance. But it will all depend
on the FRC’s enforcement.”
And unfortunately there will always
be those who just pay lip service to
reporting regulations, muses Duducu.
More helpful, she says, might be
if the FRC or similar had the
power and resources to audit
organisations themselves.
“I don’t think it’s fair to say
together for the survey for example we
Top 10 culture indicators
The top indicators large companies
in the Institute of Business Ethics
supporter database use to
monitor culture:
1 Speak-up and whistleblowing data
2 Employee survey results
3 Taxation policy
4 Diversity
5 Regulatory infringements
6 Health and safety record
7 Financial indicators
8 Customer satisfaction data
9 Engagement with charities
10 Code of ethics sign-off rate
hrmagazine.co.uk November 2019 HR 21
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