Firm culture is under ever-increasing scrutiny and is widely considered to be at the heart of the most serious employee misconduct and ethical lapses. Senior management should lead by example and ensure a good culture is instilled from the very top as this will minimize risk, foster positive employee engagement, and essentially contribute to business success. After a year of adapting to unprecedented change, it’s now more important than ever that organizations establish a healthy culture on the return to the workplace.
In recent years we have seen the increasing focus of global regulators on culture-related issues, and they are increasingly ready to step in where firm culture is seen to be problematic or creating risk. Regulators have provided greater clarity on the roles and expected responsibilities of senior individuals who can be held accountable, potentially through disciplinary action, for failings within their area of responsibility. This is important when thinking about a top-down approach on firm culture.
“The tone from the top” almost always features in regulatory statements on culture. Company leaders have decisive influence over culture and should demonstrate the behaviours that exemplify the target culture within their particular organization, recognizing that every company will be different. Clear messages need to be communicated by senior management e.g., through regular board updates and documented board discussions, emphasizing the importance of strong culture within the organization and the priority given to this. Specific workplace culture training is also an important option that employers could consider to embed these messages across the workforce. Companies could also consider putting measures in place for rewarding successful delivery of firm objectives.
Employers should ensure that the workplace is a safe place for employees to speak up should they have reason to. This could be concerns about other employees, queries about tasks, or complaints about behaviours they have witnessed or experienced. By creating an environment where everyone feels respected and valued, employees will feel empowered to take appropriate action in the face of genuine concerns. By addressing the wrongdoing at an earlier stage, the employee’s wellbeing is protected and potential reputational damage for the employer averted.
It’s important that firm leadership engage in scenario planning and conduct simulations to identify potential impacts and responses, as well as overlooked risks. They should also ensure that all relevant stakeholders such as HR, legal, compliance and business management, communicate regularly and address risk holistically. Once potential risks are identified, firm leadership should take steps to address them.
Culture assessments can help to identify important issues, observations, and concerns and allow firms to address potential areas of conflict and risk before more serious consequences arise. Ensuring that training programs are frequently refreshed and targeted towards specific risks identified by the business will make it more effective.
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