There is increased focus on the role of the company’s culture in influencing the behaviours and attitudes of its employees at all levels. This has been evident in Ireland, for example, in the recent establishment of a Commission on the Future of Policing in Ireland, and of the Central Bank in its overall regulation of banks and other financial services. There has been extensive criticism of the Garda Siochana for its unacceptable culture which is said to be non-transparent and closed, as a result of serious issues related to whistleblowing. The focus on culture by the Central Bank is a result of the financial crisis, and of research by various bodies including the UK Financial Conduct Authority. The various reviews of the financial crisis suggested there were corporate cultural problems related to risk management assessment, groupthink, and intolerance within banks of contrarian perspectives on issues facing the banks. But the issue of culture is not just confined to these two sectors. At a wider industry level, the recent issues about software systems being installed in cars so as to hide environmental emission levels has caused serious concern for the motor industry about corporate culture practices.
There’s nothing new about corporate culture issues. They have been around for a very long time internationally, with Enron in the US being frequently quoted as an example of a company that had deficient culture despite having a glowing and much-praised Code of Practice.
Regulation and consumers: Regulators and consumers are increasingly frustrated with the role of corporate cultures and indeed with the old adage of “Let the buyer beware” or Caveat emptor”. Why should a buyer have to beware? Why shouldn’t a buyer be able to rely on the company supplying a given product or service? It all comes down to the simple word “Trust”, and sadly, there have been many instances in the last couple of decades, where organisations, charities and companies perceived to be pillars of society, have not demonstrated why they should be trusted. Trust has to be earned and justified by every organisation.
Codes of Practice and culture: A Code of Practice, however beautifully written and declaring commitment to various ideals of good practice (don’t mind “Best” practice), is no substitute for a demonstrated practical commitment to how a company acts in practice. Culture is about what we do, not simply about what we say we will do. That can be difficult in a big organisation which may have many different locations, different subsidiary companies, operate in different places, have diverse product or service offerings, have diverse managements. An organisation in such a situation may in fact have an overall desired culture but there may still be various individual cultures within it that are unique to particular locations or divisions or teams or groups. In theory, desired overall culture is not hard to specify. But culture isn’t always what the top level of an organisation might say it should be. Different informal interest groups can share “understandings” of issues on the basis that they want to control some aspects of practice. Culture isn’t easy to implement because it is fundamentally a people issue, and people can have “ways” of doing things – hence the notion of there being “the way we do things around here”. Culture has to be pro-actively managed and explained and taught. It needs people at all levels within an organisation to do that. It needs authoritative champions, ambassadors, promoters – at all levels, not just at top management. But top management must constantly assert its commitment to that and that it won’t tolerate bad or unacceptable formal or informal cultures. But to do that, it needs eyes and ears at all levels, and to go beyond a glossy code.
“Culture” is about values, attitudes, behaviours, making choices and making decisions – and having clear information for doing all this, including contrarian opinions. Why would a contrarian make a contrary view? Encourage contrarians to present and justify their contrarian perspective or insights, in the interest of making the organisation or company better.
About Ed McDonald
Ed McDonald, Lecturer at the Institute of Technology Tallaght (ITT) & Independent Consultant, Marketing, Advertising, Branding, Corporate Governance, Corporate Responsibility, and Ethics.
Up to his retirement three years ago, was Chief Executive of the Association of Advertisers in Ireland and a Director of the Advertising Standards Authority for Ireland, and deeply involved with various media groups such as the Audit Bureau of Circulation and the JNRS and the JNLR. He had previously been Chief Executive of the Marketing Institute of Ireland, prior to which he had been Chief Executive of The Henry Street Mary Street Shopping Centre Ltd., a public-private partnership aimed at upgrading that part of Dublin city centre. Before that, he worked with Gunne Estate Agents, responsible for its marketing development and general management, and worked with IDA Ireland for almost 20 years in a variety of activities, including a spell promoting Ireland while based in the USA.
He has always been keenly interested in behaviour and ethical practices, reflected in him graduating in 2015 with a Masters degree in Ethics and Corporate Responsibility from Dublin City University. He wrote his Masters degree on applying ethical theories to the Irish banking crisis and how a greater focus on practical ethics might have guided the banks. He holds a Masters in Business Studies degree (wrote his thesis on Branding) and a BA in Economics and Philosophy, as well as the Diploma in Arbitration Law from UCD, and the Certified Diploma in Accounting and Finance. He is a Fellow of the Association of Compliance Officers in Ireland (ACOI) and of the Marketing institute of Ireland.
Ed continues a number of part-time teaching and consulting roles. He is a Lecturer at the Institute of Technology Tallaght in Marketing, Advertising, Corporate Governance and Ethics. He also acts as Compliance Adviser for The European Group of Valuers Association (TEGoVA) in Ireland through the Institute of Professional Auctioneers and Valuers, and he is a member of the Institute of Banking and a Fellow of the ACOI where he is a member of its Ethics Committee.
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