The culture of a company in a corporate context is the combination of values, attitudes and behaviors manifested by a company in its operations and relations with its stakeholders. The term ‘stakeholders’ of a company refers to shareholders, employees, customers, suppliers and their employees and the wider community and environment which are affected by a company’s conduct.
In UK the culture is considered a key element in the success of a company. Under UK Corporate Governance Code (applicable for companies listed on London Stock Exchange) “The board should establish the company’s purpose, values and strategy, and satisfy itself that these and its culture are aligned. All directors must act with integrity, lead by example and promote the desired culture.”
The board may influence culture in many ways and strong governance is essential for a healthy culture. Processes and practices in the boardroom needs to focus on the substance of board’s duties, what information they are given and what questions they ask. The board should assess and monitor culture of the company and where it is not satisfied, it should
seek assurance that management has taken corrective action.
If a company has a toxic culture, this will affect in the end its success and may lead to the liquidation or even criminal investigations. For instance, if members of boards have unethical activities or try to avoid the application of regulations and they continue to stay in the board, the example will be followed by other stakeholders and the company is in danger. The recent examples of banks under investigations revealed toxic cultures. The prior crises were caused by other toxic cultures.
The boards of Romanian listed companies need to consider culture. Being a board member is not only for adding a new role in CV, communicate mainly with one or two shareholders and receiving money: being a board member is promoting integrity and openness, value diversity and being responsive to the views of stakeholders.