Chairman of the FRC highlights the role of stewardship as a lever for cultural change

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14 Jul, 2016

The Chairman of the Financial Reporting Council (FRC), Sir Win Bischoff, has highlighted, at a recent forum for the financial services industry, the role of stewardship as an aspect of, and a lever for, cultural change.

Speaking at the forum, Sir Win Bischoff introduced the role of the FRC in promoting high quality corporate governance and reporting. In particular he stressed the intention of the FRC “to work with our stakeholders to encourage improvement rather than to introduce new requirements that add to the regulatory burden.” In terms of the FRC Culture Coalition (a collaboration between various industry bodies) this has involved conducting surveys and interviews with chairmen, CEOs and company secretaries to gain insight into the role of company culture.

This research has highlighted how there is “no one-size-fits-all and that the cultural indicators selected should be tailored to each company’s individual circumstances.” Sir Win Bischoff commented:

"In order to establish an appropriate culture, a board must define the purposes of the company and what type of behaviours it wishes to promote in order to deliver its business strategy. It involves establishing your own culture, asking questions and making choices."

The Culture Coalition’s findings have revealed that a company’s CEO is the one single person who has the biggest influence on that company’s culture although they stress that Boards and Investors also have a role to play. The Stewardship Code, launched in 2010, encourages a “spirit of trust, openness and constructiveness” to drive relations between investors and companies. The research carried out to date has revealed that a number of signatories of the Code are not fully demonstrating their commitment to the underlying Code principles.

Concluding, Sir Win Bischoff commented:

"The values, attitudes and behaviours which make up corporate culture are central to the way an organisation achieves its objectives. By weaving a healthy corporate culture into the business model, you are not just contributing to the overall success of your own business but creating an environment on which investors can rely. Stewardship leverages this by enhancing reputation and accountability. In that way, importantly, you and we create sustained growth in the economy."

Click here to access the full text of the speech on the FRC’s website.

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