CIPD explores culture and corporate governance in evidence to the FRC
The CIPD, the professional body for HR and people development, has been invited by the Financial Reporting Council (FRC) to contribute to its research into the evolution of the corporate governance code and the development of new approaches to governing more effectively on cultural issues.
The FRC promotes high quality corporate governance and reporting to foster investment. It has invited the CIPD, amongst other professional bodies and organisations, to submit evidence across four key themes of delivering sustainable success, people issues, embedding and assurance, and stakeholder issues.
The CIPD has been leading on the people issues them of work and has gathered insights in a body of evidence entitled: ‘A duty to care? Evidence of the importance of organisational culture to effective governance and leadership.’
In ‘A duty to care?’ the CIPD considers a number of important questions posed by the FRC, and draws on extensive research from the HR profession into the understanding of organisational culture. Key questions about the purpose and value of culture, the measurement and reporting of cultural issues, and the impact and importance of workplace concepts such as employee wellbeing, engagement and performance are explored.
Peter Cheese, CIPD Chief Executive, comments: “Culture is central to the success of organisations and to the wellbeing of our workforces, but it’s complex to understand and takes time to change and effort to sustain. Positive and healthy cultures are true to their stated values, give voice to people, engage them, and create the best environment for people to perform in, thereby creating value and competitive advantage.
“However, as recent corporate scandals have shown, when cultures turn toxic trust breaks down and performance, wellbeing and reputation suffer. This is why boards have a fundamental role in understanding the cultures of their organisation and how culture is changing or evolving, as well as leading from the top in the behaviours and values they demonstrate. They must also hold management to account to ensure that culture, values and behaviours align, and the decisions the organisation makes enables it perform financially, ethically and sustainably.”