Corporate culture increasingly a boardroom agenda in India
India has emerged as a staunch advocate of building a good corporate culture within a company. A new report surveying a number of companies across the world has revealed, among other trends, that 80% of Indian companies place culture as a key item on their executive agenda.
In order to determine the importance given to corporate culture across the world, both institutionally and otherwise, Grant Thornton surveyed 2,500 companies globally, spanning 36 economies. Across the globe, the accounting and consulting firm found that culture has gained significant importance in the corporate world, particularly with the increasing emergence of regulatory frameworks to ensure employee welfare.
The priority given to culture is evident by its placement on board agendas across organisations. Globally, the report found that half the companies had culture as a standing item on the agenda, while 71% have gone to the extent of establishing internal mechanisms to foster the desired environment. Meanwhile, 63% take the culture of their customers into consideration when making decisions, and 57% even consider their supplier’s culture.
Businesses in India appear to have recognised this shift in focus, and are giving increasing importance to corporate culture through a number of different measures. For example, 85% of the companies in India have established internal mechanisms for culture and employee behaviour. This was the second most-cited measure being taken by boards to improve conditions in India. No other region placed this in their top 3.
80% have made corporate culture a standing item on their board’s agenda, while 66% of the companies in India even take their customer’s culture into consideration, which is higher than the global average. When asked about the factor that most affected the reputation and brand of a country, 81% of the companies in India cited Business culture as the most important, second only to Australia at 83%.
Breaking this down, 87% cited that the treatment of and relationship with employees was of utmost importance. India is the only major economy where this was the most frequently cited factor. An identical 87% also felt that the conduct of the senior management team played a highly important role. Meanwhile, 85% felt that the quality of their products and services was what played the most important role.
The report revealed how the government of India has also become involved in corporate governance, primarily through regulations and guidelines. For example, the Securities Exchange Board of India recently stipulated that company culture and values should be determined at the board level. This is due to the fact that boards play an important role, particularly in owner-managed companies, where it is important that the owner himself disseminates his vision of the company’s environment. Not only does this boost the company’s productivity, but also makes it an attractive destination for talented professionals. In addition, institutionalisation efforts are also well underway in the country in the form of town hall meetings, trainings, and detailed codes of conduct.
Commenting on the report, Harish HV, a partner at Grant Thornton India and a member of India's Leadership Team said, “What’s undeniable is that around the world, the issue of corporate culture is gaining increasing regulatory attention as a foundation of good governance. As a result, the issue has arguably never been as high up the business agenda as it is today.”
Remarking on the extension of these considerations to customers and suppliers, another Partner at Grant Thornton India, Bhanuprakash Kalmath said, “Corporates recognise third party risks and are improving their engagement with those parties to ensure their culture is aligned with their own vision and mission. Customers and suppliers are being considered as partners.”
