Culture reporting - making it meaningful

Over the past few years, there has been a greater focus on culture in corporate reporting. Both the QCA and UK Corporate Governance Codes require culture to be discussed within an Annual Report. Culture can be difficult to discuss in a way that is not ambiguous and is meaningful, so how can you ensure that the way you report on culture gives greater clarity to your investors?

Metrics can be linked to various elements of culture, removing some of the ambiguity that comes with it. These metrics can come from employee surveys, including aspects such as employee engagement scores or percentage of employees who feel that they can work effectively with their team as examples.

They can also come from looking at employee turnover levels and the key reasons that employees have for leaving the business. Ensuring that the work environment is suited to the needs of employees can also be included here, such as, metrics around health and safety, incident rate and number of injuries, or an employees' ability to work in a flexible way through use of remote and hybrid working.

Cultural-related metrics can be used to showcase the Board’s role and commitment to monitoring culture. The metrics could align with your company’s purpose, values or strategy, allowing the Board to draw meaningful conclusions about the state of the company’s culture and whether corrective action is needed.

Utilising metrics within culture reporting can support your investors in identifying statistical information that they can compare and make judgements on.

It is a great idea to showcase a real-life example of how the culture has been put into practice through the use of a case study. By doing this, you can show how the main principles of the culture have been applied across the business. This is particularly powerful when showing how the Board has applied the culture of the organisation to make a particular decision. This could be a decision on whether to acquire a business or how to deal with restructuring of the business. When it can be evidenced that the Board is applying culture within key decisions, it gives confidence that the Board is following their values and leading by example in their organisation.

Often, companies will focus on the Board's view of culture and how they measure it. However, as culture is all about the behaviour and decision-making of employees, including their view on culture can elevate reporting. This can be done by including some key quotes of employees that put the culture of the business in their own words and through the lens of their experience of working in the business. It can also be done by including points on culture in the content that discusses engagement with employees. Ensuring that the Annual Report includes content on how the Board has listened to employees' views on culture is also beneficial. Employees' views can be gained through town halls, hotline and whistleblowing reports, exit interviews, employee surveys and Glassdoor feedback. This should then be backed up by outlining what issues and requests were raised by employees, and how these were then considered and addressed by the Board. This can demonstrate that there is clear two-way dialogue and collaboration between the board and the employees in an organisation, and not just a top down approach to culture.

There are many ways in which you can inform your investors and wider stakeholders of how you live and breathe your culture. If you would like to find out more about how to effectively report on this, get in touch with us, we would love to help!