FRC publishes a report on the opportunities and challenges of creating positive culture

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13 Dec 2021

The Financial Reporting Council (FRC) has published a report on the opportunities and challenges of creating positive culture.

When the UK Corporate Governance Code was reviewed and updated in 2018, directors were urged to ensure that the culture of their companies promoted integrity and openness, valued diversity and was responsive to the views of shareholders and other stakeholders. In addition, legislation was introduced to require companies to explain how they have engaged with stakeholders more widely in the section 172 statement.

The report from the FRC aims to promote good practice and positive working culture in companies, bringing together a wide range of views from board directors, leaders, senior individuals from across different functions and workforce representatives. In this research, the FRC has focused on how companies frame this culture, how they assess, monitor, embed and assure it, and what enablers and barriers they encounter.

The research was conducted to follow up on the FRC’s Corporate Culture and the Role of Boards report, in line with the FRC’s commitment to continue to encourage debate on culture, and to identify and share good practice. The following key findings recognise that positive culture should be attained through honest conversations and by building trust, which will support companies in achieving success over time:

  • Leadership on culture should come from the top, through actions and attitudes, but the workforce must feel engaged and able to contribute.
  • Everyone has a role to play: the board should ensure that the organisation’s culture is aligned with purpose, values and strategy; the CEO is responsible for embedding culture throughout the company; and managers, properly empowered and supported, are critical to achieving culture change.
  • Assessment and monitoring of culture are important.  Without clear and timely follow-up actions and feeding back to workers and other stakeholders, companies can be accused of ‘culture washing’, leading to the loss of trust – the biggest barrier to driving positive culture.

A press release and the full report are available on the FRC website.

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