Corporate culture – one of the top 3 priorities for board directors

Corporate culture – one of the top 3 priorities for board directors

Mon 05 Oct 2020

In partnership with Board Agenda and INSEAD, Mazars unveiled the results of its study dedicated to the level of maturity of boards of directors concerning corporate culture. Gathering the perspectives of 450 managers in Europe, the survey highlights the awareness of those boards. But a gap remains between strategy and corporate culture.

Corporate culture on the board’s agenda

Corporate culture has a increasing importance for the board of directors. Following strategy and financial performance, board directors said that corporate culture was their third most important priority. The majority of those questioned agree that it is their responsibility to define and spread culture within the company.

The vast majority (75%) of managers rely mainly on the feedback of their employees, on client opinions and situations of riskto assess their corporate culture. Only 25% of boards have conducted an internal and external audit. The press, social media and the web are still rarely considered by the members of boards, but these elements have a strong influence on corporate culture. At a time when 85% of the value of large companies relies on the intangible – human capital, reputation and the brand – this can’t be overlooked.

A sustainable growth lever

Despite this awareness, we observe that it has rarely been translated into action, performance indicators or growth levers. Only 1 out of 5 directors in Europe reports spending time on issues relating to corporate culture. 66% hold the view that the board does not take corporate culture into account in the assessment of risks and doesn’t even measure the risk linked to corporate culture. In addition, only 1 in 2 directors claims to ‘reasonably understand’ the culture that the company wants.

“All directors questioned agree on the need to put corporate culture on the board’s agenda but the time is now to translate it into action and spread it across organisations. Companies are being encouraged by millennials who, by searching for meaning, are strongly urging companies to review how they conduct business. Corporate culture is vital for strategy and management of organisations in their quest for sustainable and responsible growth, which is passed down from one generation to another,”declared Gilles Magnan, Partner and member of the executive committee of Mazars in France.

The full survey is available online.

Background on the survey

The survey was conducted among 450 chief executive officers, chief finance officers, board chairs, executive and non-executive directors, company secretaries, risk officers and investment managers. The respondents represented both private and publicly listed companies and were drawn from the UK and continental Europe.