Strategic HR Analysing culture
The new UK Corporate Governance Code
The Code sets out that for accounting periods starting on or after 1 January 2019 the board should:
workforce, a workforce advisory panel, or a
designated non-executive
Describe engagement with employees in the
annual report, and the board’s regard for
employee interests and the effect on principle
decisions during the year
Report on the RemCo’s engagement with the
workforce to explain how executive pay aligns
with wider pay policy
Describe the Nomination Committee’s work in
the annual report, including appointments,
People
draw on it
when they
don’t want
to think
too hard
about
something
succession planning,
and pipeline diversity,
linking this to company
strategy and reporting
the gender balance
of those in senior
management
can create a questionnaire
complex enough to capture that.”
A red herring?
And concerns don’t end at the difficulty
of reporting on culture, or at warnings
about consultants. Ask a range of
experts and HR professionals about
culture and it’s akin to opening
Pandora’s Box. You get a variety of
definitions and approaches, with some
unconvinced the construct has much
value at all.
A good time perhaps to bring in
professor of organisational psychology
at Queen Mary University of London
and HR fad critic Rob Briner: “Culture
is one of those things that after five
minutes of thinking about it seems to
make a lot of sense. But after 10
minutes it’s a bit more ambiguous.
Think about it for half an hour and
you think ‘actually I’m not sure it’s
worth pursuing’.”
He adds: “Similarly to engagement,
people draw on it when they don’t want
to think too hard about something.”
For Briner the difficulty of
measuring culture is the clue. If you
can’t describe it without resorting to
other terminology and concepts
therein lies the rub: “When I say
‘what do you mean by culture?’
People start talking about
behaviour. I say ‘so you’re
Understand the views of key stakeholders
and describe in the annual report how
their interests and the matters in section
172(1)(a) to (f) of the Companies Act
2006 (setting out that ‘A director of a
company must act in the way they
consider, in good faith, would be most
likely to promote the success of the
company for the benefi t of its members
as a whole…’) have been considered
in board discussions and
decision-making
Use one of a
combination of
the following or
explain alternative
arrangements: a
director from the
People Taskforce in 2004,
and the CIPD’s work on Valuing Your
Talent, and equivalent work in the US
where a group of HRDs tried to put in
place mandatory standards for
reporting,” he says.
“But they’ve all come to pretty much
the same conclusion – that if you try to
standardise metrics you end up
reporting on fairly meaningless things
because no metric will be meaningful
for all organisations.”
Many of the past few years’
governance scandals (think Weinstein,
Oxfam, Volkswagen diesel emissions)
were essentially the result of people’s
inability to report wrongdoing,
Kakabadse points out. So the key thing
many should be – and indeed are –
seeking to improve about their cultures
is people’s ability to speak truth to
power. But straightforward surveying
and measurement will struggle to
capture this.
“Senior management may be trying
to get the most open communication
but the one thing people fear is
challenging the CEO. Even when you
put that on a questionnaire… you
can imagine the paranoia going on,”
says Kakabadse.
“What’s impossible to audit
are the mixed messages that are
there. Because there’s no way
any consulting body or HRD
Establish the company’s
purpose, values and
strategy
Ensure these are aligned
with the company’s culture
Promote the desired culture
Assess and monitor culture
– the annual report
should explain the board’s
activities and any
action taken
Decide who their
stakeholders are
Ensure effective
engagement with and
encourage participation
from shareholders and
stakeholders
and boards astray: “HR will run off to a
bunch of shyster consultants who will
produce dashboards that purport to
measure culture. And three years down
the line we’ll discover they don’t
measure what we thought they did.
“I see so many people who try to do
HR sitting in front of their computers,
looking at data,” he adds. “I fully accept
that the revolution in data analytics will
profoundly change the way HR is
practised… But human relationships
are complex and it won’t always be easy
to diagnose your culture.”
“Measurement of culture is now
being taken over by consultancies,”
agrees Andrew Kakabadse, professor of
governance and leadership at Henley
Business School, University of Reading.
“That’s a problem because they’re
trying to push their particular brief
and scale it across a number of
organisations, so there isn’t that
personal touch. And by going
excessively into measurement I have
seen management losing all touch with
common sense.”
Particularly dangerous would be any
attempt to benchmark companies
against each other culturally, feels Jon
Ingham, founder of Strategic Dynamics
Consultancy Services and former HRD
at EY. “The FRC stuff is not the first
attempt to look at this. There was
Denise Kingsmill’s Accounting for
18 HR November 2019 hrmagazine.co.uk
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