Prioritizing Corporate Culture Starts at the Top
In spite of clear evidence indicating that in order to develop a corporate culture of ethical behavior you must begin at the top—with the board of directors (BOD)—company leaders still often fail to devote the necessary attention to this topic. In a recent article for the Journal of Accountancy, author Sabine Vollmer delves into the key role that the board of directors plays in promoting an ethical culture.
Following a brief, statistical overview of the current state of the prioritization of corporate culture, Vollmer offers some tips for identifying problem areas within your organization’s ethical culture. The key is to not only have a code of ethics and mission statements, but to also have a BOD and members of senior management who lead by example in adhering to the code and mission. Vollmer shares the example of one company that holds an annual confidential meeting of executives to brainstorm about potential red flags within the corporation’s culture.
The article concludes with a list of ten recommendations for establishing and strengthening an organization’s corporate culture. The items come directly from the 2017 Blue Ribbon Commission of the National Association of Corporate Directors (NACD). The advice includes, but is not limited, the following:
- Company leaders should establish clear behavioral expectations, model said expectations, and develop policies and controls to incentivize the members of their organization to do the same.
- The BOD should carry out a regular evaluation of board and company culture and use the results to help make adjustments and improvements.
- Company management and the BOD should incorporate discussion of company culture into their strategic talks.
For more details, read the article in full at the Journal of Accountancy.