"The employee's voice" and "organisational culture"
The UK is in the vanguard of a very interesting situation. As of 2018, UK company law mandates that listed companies must report on "the employee's voice" and "organisational culture".
It is not just the UK that is moving in this direction. Australia and other countries are also starting to recognise that societal voice is becoming much more important in terms of how business is being run. That leads to 2 thoughts, but one particular outcome that is very significant.
If you start to list "culture" as a part of your legal reporting then you have to get into the notion of 'measurement'. You cannot audit anything unless it has some sense of 'Where are we now?' and 'Where do we need to be?' And, this cannot be abstract. We are talking now about measuring culture.
2) Stakeholder capital
This is the leading edge of a shift from 'shareholder capital' to 'stakeholder capital'. There has been a good deal of discussion on the CEO RoundTable recently talking about 190 major US companies moving towards stakeholder capital.
In a sense, they don't have a lot of choice. Society is not going to let business run itself without that voice being represented. One hundred years ago we saw antitrust legislation; we saw the advent of unionisation; and laws that allowed collective bargaining to take place.
Why culture now?
There is a general shift from 'what we do currently' to really starting to think about:
- How do we measure and report culture?
- How do we make sure that not only shareholders are aware of the culture we are seeking to create?
And the voices within society saying:
- We need to have an insight; a view.
- We have to have a voice, in terms of how companies are run in the future.
We are starting to see this in the conversation around the shift to stakeholder capital.
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