Sir Winfried Bischoff, chairman of the Financial Reporting Council (FRC), advises in his foreword to the Council’s new report on corporate culture that companies should connect purpose and strategy, align values and incentives with and assess and measure culture. “Investors should consider carefully,” he adds “how their behaviour can affect company behaviour and understand how their motivations drive company incentives.”
This new report from the FRC was undertaken to “gain a better understanding of how boards are currently addressing culture, to encourage discussion and debate, and to identify and share good practice to help companies.” In order to prepare it the FRC conducted an extensive literature review, considered submissions from its partners, conducted interviews with FTSE chairmen and CEOs, surveyed of heads of internal audit, chairmen and company secretaries, and conducted “many roundtables and discussions with investors, a range of professionals working in companies, and organisations with expertise and experience in company culture.”
