Companies must improve the integrity of their organisational culture before they can win back broad support from society, business leaders were warned this week.
Sir Win Bischoff, Chairman of the Financial Reporting Council (FRC) told delegates at the regulator's conference: "Rebuilding genuine confidence in business and long-term prosperity demands companies to have a culture that lowers the risk of failure and achieves a wide range of positive outcomes, including serving the needs of wider society.
"The Prime Minister has been outspoken about her government's plan for business reform. In the light of Brexit, restoring trust and building confidence is even more imperative for our prosperity and wellbeing. We need a concerted effort to improve the integrity of business and its connectivity to society. There simply has to be increased focus on company culture. When there is a healthy culture, the systems, procedures, and the overall functioning and mutual support of an organisation exist in harmony. This will lead to enhanced integrity, confidence, long-term success and ultimately trust."
In July the FRC published a report, Corporate Culture and the Role of Boards, that highlighted how stakeholders and society in general have a vested interest in healthy corporate values, attitudes and behaviours that lead to sustainable growth and long term economic success. In it, Sir Win wrote: "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. Poor behaviour can be exacerbated when companies come under pressure. A strong culture will endure in times of stress and mitigate the impact. This is essential in dealing effectively with risk and maintaining resilient performance."
October's issue of The Actuary examines how to analyse and transform organisational culture in an article by Colm Fitzgerald, Jonathan Allenby and Monika Smatralova.