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Companies Face 'Wake-Up Call' On Culture, Says FRC

Posted on September 20, 2016 at 12:05 AM

Companies face "a wake-up call to review their cultures" before they can win back broad support from society, business leaders will be told at a conference at Mansion House today, in the City of London.

Sir Win Bischoff, Chairman of the Financial Reporting Council (FRC) will tell delegates at the regulator’s conference, ‘Culture to Capital: aligning corporate behaviour with long term performance’, that companies must establish a culture that fosters trust and encourages good behaviour at all levels in a company’s organisation.

“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”, Sir Win will say.

Theresa May, the UK Prime Minister has been outspoken about her government’s plan for business reform - as she was even before she became Prime Minister.

"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" Sir Win will say.

"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” he will go on to say.

In July the FRC published a report, Corporate Culture and the Role of Boards - which was covered by me here on Forbes: UK Regulator Gets Serious On Company Culture And Role Of Boards.

In the following weeks I also wrote The Case of The Listed Business With A CEO '100% Unaware' Of Human Rights Violations, BHS: A Story Of 'Personal Greed And The Unacceptable Face Of Capitalism' and A Little For You, And Lots For Me - Pay Holds Up A Mirror On UK Corporate Culture.

It was a prolific month for all the wrong reasons. But it is not only British business that has to be better attuned to culture- Wells Fargo, the US bank and financial services business has been giving us a good demonstration of blindness here - and then there is Volkswagen. In fact, Britain may be one of the first countries to do something about bringing attention to the power of corporate culture - for bad and for good.

Culture is the everyday face of business, both externally and internally - and it has many components, including what everyone gets paid, and how they are treated. "If corporate governance is the essence of  abusiness, then corporate culture is its daily face" I can tell you I will say - because I am privileged to be part of CEO In Conversation today at the conference with Sacha Romanovitch, the CEO of Grant Thornton and Justin King, Vice Chairman of Terra Firma - and ex CEO of Sainsbury's.

Sacha Romanovitch, CEO Grant Thornton

Justin King, Vice Chairman Terra Firma

The conference at Mansion House today will hear from other notable business leaders including Sir Roger Carr, Chairman BAE Systems, Conor Kehoe, Senior Partner McKinsey, Mark Austen, Chairman LV=, Amanda Mellor, Group Secretary M&S, Elizabeth Fernando, Head of Equities USS, and Philippa Foster Back, Director Institute of Business Ethics. They will explore the relationship between corporate behaviour and long term value creation for all stakeholders.

The conference will be live streamed and links will be available on www.frc.org.uk and @FRCnews on Twitter.

You know where to  find me - @dinamedland, or google Dina Medland Forbes: it feels like another prolific fortnight is looming.

Categories: Governance, Culture, Business