Despite culture being within the top three priorities for company boards, only 20% report spending the time required to manage and improve it. The finding is part of a European survey conducted by Mazars, the leading international tax, accountancy and advisory firm, alongside Board Agenda and INSEAD.
The survey, completed by over 450 directors and board members across Europe, highlights the disparity between thought and action with regard to culture. Nearly two-thirds (62%) felt that they were primarily responsible for setting culture from the top of an organisation, yet a similar proportion (63%) either do not consider culture as part of their formal risk assessment or fail to routinely consider the risk associated with their corporate culture.
At the same time, only a quarter of boards undertake an internal or external audit of their culture. The other 75% rely upon sources such as on employee feedback, customer surveys and risk events such as rule breaches, HR issues and compliance-monitoring. Far less attention is paid to external sources of information such as social media, press commentary, or engagement.
Anthony Carey, UK Head of Board Practice, Mazars, says: “It’s good the importance of corporate culture is now widely recognised by boards, but the survey also highlights that translating that understanding into focused action remains very much work in progress. Boards need reliable information on the actual culture in the business and be clear on how they are going to close any gaps between that and their desired culture. Achieving culture change is not easy, but having a healthy culture is essential if the business is to achieve sustainable success”.
Trevor Pryer, Executive Director at Board Agenda, agrees: “Even if boards are thinking more about corporate culture there appears to be a discrepancy between what directors are thinking and what happens in practice. It is a gulf that needs to be bridged if leaders are to maintain, or restore, public trust in their businesses”. Erik van de Loo, Professor of Organisational Behaviour, INSEAD, adds: “Boards acknowledge the vital significance of culture for the long-term success of a company but do not yet know how to effectively address this at board level. The first step is to address the culture of the Board itself”.
David Herbinet, Global Head of Audit at Mazars, concludes, “Many years after Peter Drucker’s famous quote, it does seem that more boards are coming around to the idea that Culture may, indeed, eat Strategy for breakfast. Much work, however, remains to be done by Boards to fully grasp this lesson and use it effectively in decision-making, and for investors to properly assess it, for the long term benefit of companies, their stakeholders and wider society”.
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The ‘Board Leadership in Corporate Culture: European Report 2017’ is the first survey of its kind to measure how effective boards and directors across Europe are at leading and managing corporate culture, a crucial success factor in todays’ business environment. The survey was conducted during the summer of 2017, with 450 responses from chief executive officers, chief finance officers, board chairs, executive and non-executive directors, company secretaries, risk officers and investment managers. 67% of respondents worked for public companies in the UK & mainland Europe.
Mazars is an international, integrated and independent organisation, specialising in audit, accountancy, advisory, tax and legal services. As of January 1st, 2017, Mazars operates throughout the 79 countries that make up its integrated partnership. Mazars draws upon the expertise of 18,000 women and men led by 950 partners. We assist clients of all sizes, from SMEs to mid-caps and global players as well as start-ups and public organisations, at every stage of their development.
In the UK, Mazars has approximately 140 partners and over 1,700 employees, and is ranked one of the top 10 firms nationally.
For all national news and expert commentary, visit our website at www.mazars.co.uk
News and our latest announcements are also published via the firm’s page on LinkedIn at www.linkedin.com/company/mazars-UK or you can follow us on Twitter @Mazars_UK
About Board Agenda
Board Agenda is a progressive and independent resource for a global community of board directors, investors and professional advisers, that provides insight, intelligence and shared experience about governance, strategy, risk and ethical business issues that are shaping corporate strategy; with a mission to enable effective boards and drive business success. For the latest news, analysis and expert commentary, please visit our website www.boardagenda.com. You can follow Board Agenda on Twitter @BoardAgenda
As one of the world’s leading and largest graduate business schools, INSEAD offers participants a truly global educational experience. With campuses in Europe (France), Asia (Singapore) and Middle East (Abu Dhabi), and alliances with top institutions, INSEAD’s business education and research spans around the globe. Our 145 renowned faculty members from 40 countries inspire more than 1,400 students in our degree and PhD programmes. In addition, more than 11,000 executives participate in INSEAD’s executive education programmes each year.
INSEAD’s innovative programmes are internationally recognised. Of particular note, the Financial Times has ranked INSEAD as the #1 MBA programme in the world for two years in a row (2016 & 2017).