Tags: Corporate governance
This report represents the conclusions of a workshop of senior regulators, company directors and executives and investors exploring ways of identifying early warning signs of a weak culture.
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This report represents the conclusions of a workshop of senior regulators, company directors and executives and investors convened by three organisations in December 2015 to explore ways of identifying early warning signs of a weak culture.
The workshop found that a major source of corporate stress was when corporate leaderships imposed short‐term targets which staff found difficult to meet. This could exacerbate a rift between staff and management. In such cases the board was often unable to get an accurate picture of what was going on.
The report highlights the critical nature of good governance, but notes that there should be a broader definition of what this means. Governance is not just considered a matter of board processes, but should run through all areas of the company. More attention should be paid to the role of human resource departments which are often charged with the task of embedding culture, and to internal audit, which is well placed to detect when culture is slipping.
Finally transparency and openness matter. A good culture means being able to discuss difficult issues.