Lead by example, and others will follow that lead. But research among European company board directors reveals that this belief is not being reinforced by action on how their businesses behave.
Mazars is pleased to present the research report Board Leadership of Corporate Culture in Europe which was done in association with Board Agenda and INSEAD. This research shines a light on the mismatch between words and deeds – it is to be hoped that the emphasis that is placed on the tone from the top, especially in the role of the CEO, will rapidly spread around the boardroom table and into the business.
“Understanding both the desired corporate culture and that which exists in practice are vital if a board is to provide effective leadership and direction to the business,” says David Herbinet, Global Head of Audit at Mazars. “Many boards need to assess whether their information on cultural issues is sufficiently comprehensive, structured and subject to independent scrutiny to meet their current and future needs,” says Anthony Carey, Head of Board Practice at Mazars in the UK.
The survey was conducted during the summer of 2017 among 450 chief executive officers, chief finance officers, board chairs, executive and non-executive directors, company secretaries, risk officers and investment managers. The respondents represented both private and publicly listed companies and were drawn from the UK and mainland Europe.
- Tone at the top: While believing that the culture of business can be influenced from the top, particularly through the role of the CEO, only one in five board directors believe they are spending the right amount of time addressing cultural issues;
- Perception versus reality: a half of these board directors say they are "reasonably clear" on the desired culture of their business, but only a fifth say their boards fully consider the desired culture of the business;
- Strategic gaps and alignments: Half say there are either significant gaps between strategy and culture or have not spent much time considering alignment between the two. However, the other half believe they are very clear on alignment between strategy and culture or that their strategy is broadly consistent with their culture.
Overall, the findings indicate that although awareness of the importance of corporate culture to business success is recognised, boards have yet to find a way to discuss corporate culture in a meaningful way and hardly include culture as a relevant item in their own performance assessments.