General

Move over Covid. Culture’s the thing.

31 January 2022

The Financial Reporting Council (FRC) urges companies to consider corporate culture as investors continue to demand non-financial information. We explore three key benefits of positive company culture - and why businesses need to communicate them effectively.

The ‘impacts of the COVID-19 pandemic’ have been pondered across the business world for almost two years. Whether it’s supply chain disruption or changing consumer behaviour, every business has had to deal with the unique challenges raised since 2020 in their own way. What almost all of them share, however, is the question of a changing relationship between employers and employees. In an environment of new expectations on working from home, work-life balance, and ESG action, company culture is more important than ever.

A recent report by the Financial Reporting Council (FRC) into corporate culture urges companies to carefully consider these interrelated issues, pointing to the well-established relationship between positive culture and improved performance. As well as benefits in efficiency and process, the FRC notes that establishing, monitoring, and reporting on a positive company culture is playing an increasingly important role in meeting investor demands for non-financial information that can elucidate a company’s value creation framework. Informative disclosures on culture do more than just describe how companies motivate and engage their employees; they are a crucial part of the corporate story that provides insight into the business’ purpose, strategy, and resilience in the face of challenges.

Beyond these advantages, at Gather we see three more benefits to positive company culture in the hybrid world: the role culture plays as a driver of a strong, differentiated brand.

Number one: glue. Culture is fast becoming the only glue. Buildings used to be at least vaguely sticky. Their physicality fed cultural reservoirs and created and sustained company myths. But as these things get harder, the virtual employee engagement market can only go so far. Hybridisation dilutes references. Super glue culture enables you to lead and succeed virtually.

Secondly, differentiation. Giving your brand sharper elbows is experiential. A positive culture transmits cues that can be transformative. Marketplaces understand what it’s like to work with you and be in your company. The world will credit you with remarkable organisational power. When you are awarded a nickname, you know you’ve made it. Culture creates the difference.

The third is strategy. In a multi-platform environment that’s redefining how we think about work, culture is a fast lane to decision making. The corollary of positive culture is the joy of understanding. We know what we are about, so we know what we want our relationship with AI to be. We understand our immutable values. Peter Ducker’s observation about culture eating strategy for breakfast has never been more true.

For support on how to communicate non-financial information effectively, guidance on the latest regulatory advice, brand positioning and messaging, purpose or strategy, contact rochelle@gather.london