14 July 2016 | Herpreet Kaur Grewal
Culture is “central” to the success of organisations and to the well-being of workforces, according to research by the Chartered Institute of Personnel and Development (CIPD).
In its report ‘A duty to care?’ the CIPD considers extensive research from the HR profession into the understanding of organisational culture. Key questions about the purpose and value of culture, the measurement and reporting of cultural issues, and the impact and importance of workplace concepts such as employee well-being, engagement and performance are explored.
Peter Cheese, CIPD chief executive, said: “Culture is central to the success of organisations and to the well-being of our workforces, but it’s complex to understand and takes time to change and effort to sustain. Positive and healthy cultures are true to their stated values, give voice to people, engage them, and create the best environment for people to perform in, thereby creating value and competitive advantage.
“However, as recent corporate scandals have shown, when cultures turn toxic trust breaks down and performance, well-being and reputation suffer. This is why boards have a fundamental role in understanding the cultures of their organisation and how culture is changing or evolving, as well as leading from the top in the behaviours and values they demonstrate. They must also hold management to account to ensure that culture, values and behaviours align, and the decisions the organisation makes enables it perform financially, ethically and sustainably.”
The CIPD’s report explores the crucial role that boards play in setting the culture of the organisation and maintaining the standards for the business to operate against. Here a few of their top-level recommendations.
• Champion change from the top: The board must lead cultural change from the top and evidence its impact on the business. Appointments must be based on merit and quality and the board should be diverse and representative of the organisation and community in which the business operates.
• Empower the board’s committees: Empower the remuneration committee to challenge and act with integrity, independence and transparency.
• Develop leadership capability: Leadership capability should be built in line with cultural and behavioural values and leaders must role-model these attributes to the wider business
• Value alignment: Align core values at the very top of the organisation and apply a values lens to board decision processes, focusing on trust as an enabler of positive and productive cultures.
• Address reward: Ensure that reward decisions take cultural alignment into account, and align measures of performance and culture to address the issue of high pay in particular.
• Invest in people capability: Invest in building HR and people management strategy and capability that focuses on leadership and management culture and embeds cultural values across all levels of the organisation.
