As ESG continues to be the priority for companies and boards, culture has emerged at the cornerstone of the ESG conversation. Corporations are increasingly called upon to articulate a sense of purpose and a clear set of values while balancing the interests of a range of stakeholders. Consumers, policymakers, and the public expect companies to deliver on their promises: treating employees fairly, being responsible environmental stewards, promoting racial justice, and working to benefit their communities.
“Corporate culture is rooted in its values—explicit and implicit—and it is what makes a company stand out,” says Ty Francis MBE, Chief Advisory Officer at LRN. “This study provides a toolkit for board members and CEOs to shape and assess company culture.”
Public attention to corporate culture and corporate ethics has never been higher. As a contributor to the report put it, “It’s a board’s responsibility as representatives of shareholders and stakeholders to make sure that we’re doing everything we can to make sure the company has a culture that is more likely to lead to positive outcomes.”
The guide was developed as a peer reviewed framework, over 70% of contributors are independent directors, of which 60% are current or former chief ethics and compliance officers, representing more than 60 public companies.
Highlighted (right) are the five priorities outlined in the report, showing how each of them has a direct relationship to board oversight:
Prioritize culture on the board agenda – Ensure that executives know that Board members want to know about issues and understand problems early. Board members need to request direct info and should dig deep to get it.
Challenge the board’s culture – Foster a sense of community and speak up culture to ensure that senior management are seen and heard and supported – even if they have a difference of opinion from board members.
Measure and monitor – Establish data protocols, expand the range of cultural data and benchmark against other companies to maximize the effectiveness of reporting, particularly as measuring and monitoring evolves over the next few years.
Articulate the desired culture – Break down ethical culture into components that fosters concrete conversation partnership with the leadership teams to imprint the aspects of culture board members aspire to achieve.
Establish clear communication – Boards need to explore who in management owns culture measurement and have the individual report directly to the board.
In addition to these five priorities, the report includes a list of questions that directors reflect on and us to engage management in the conversation. As one participant put it, “board members need to ask questions and ask for information. There needs to be an understanding that board members are driving the issue.”
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.