Governance and corporate culture: What really matters?

  • A poor culture will invariably engender poor policies and procedures.
  • If values and attitudes change, then behaviour will follow.
  • This article highlights the values, attitudes and behaviours that potentially serve as red flags of poor culture.

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Corporate culture can be very difficult to define. It is probably best defined or recognised by when it is poor. This article explores some examples of poor corporate culture highlighted in recent public inquiries and royal commissions, and what role the governance professional can play to help improve corporate culture.

Corporate culture is the product of many things, including values, attitudes and behaviours. Values are those virtuous qualities which individuals and organisation aspire to, such as trust, respect and integrity. Attitudes are the thoughts and feelings of individuals derived from their beliefs, opinions and biases (based in values) which drive behaviours. Behaviours are the actions of individuals and organisations which drive outcomes.

Governance is primarily concerned with how things are done in an organisation (expressed in rules, policies, processes, procedures, etc), which are driven by values and attitudes. Behaviours will, to a very large extent, be driven by rules, policies, processes, procedures, etc, and also by the conduct of others (especially senior staff). The connection between corporate culture and governance is obvious and important.

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