Helen Pitcher OBE participated in an article by Jenny Roper for HRMagazine.
Below is an expert.
New reporting requirements have been introduced around monitoring culture more closely. JENNY ROPER asks if this will improve corporate governance or be just another box to tick
“Rob is the miserable one of the partnership,” jokes visiting professor and executive in residence at IE Business School Gareth Jones, referring to his book – and article-writing partner Emeritus professor of organisational behaviour at London Business School Rob Goffee (who, poor man, is not on the phone call to defend himself).
But despite Jones’ opening quip it is he who is foretelling doom. “Here’s a miserable prediction: in light of the new corporate governance reporting guidelines boards will be saying to their HR departments ‘WE NEED SOME MEASURES!’” the former BBC director of HR and internal communications says, shouting this last part down the phone so loudly that those nearby in HR magazine’s office look round in surprise.
Jones is referring to the Financial Reporting Council (FRC)’s Corporate Governance Code, published in July 2018 and containing new provisions requiring boards to ‘assess and monitor culture’, and ‘seek assurance that management has taken corrective action’ in cases where it is ‘not satisfied that policy practices or behaviour throughout the business are aligned with the company’s purpose, values and strategy’ – with the board’s activities and any action taken in this area explained in the annual report.
The fact that this is a new code rather than a revision (as has been more typical) is significant in terms of how much more central culture and other related concepts such as values and engagement now are.
“Culture I think got one reference in the old code; it might even have been in the preface,” muses Simon Lowe, a consultant at Grant Thornton and chairman of its Governance Institute. “Now it’s in the first section and then the provisions… so now rather than it being an ephemeral concept it’s seen as at the heart of business.”
This means the concept is making its way much more solidly into the boardroom – something that hasn’t historically been the case, reports chair of Advanced Boardroom Excellence Helen Pitcher. “There are certain boards that when I’ve said to them: ‘what’s your cultural oversight?’ they say: ‘we don’t get involved in that, we leave that to the subsidiary company’,” she reports.
“I say: ‘how do you know that’s happening in your subsidiary?’ They say: ‘we get an occasional map from HR’. I say: ‘and how much time does that get on the agenda?’ They say: ‘20 minutes towards the end’, so you know damn well it won’t get even 20 minutes…”
