Boards and regulators – Shaping and assessing organisational culture

Alan Brener

Chapter 2 in Corporate Governance and Culture in Financial Institutions, 2025, pp 56-84 from Edward Elgar Publishing

Abstract: This chapter suggests a number of practical measures which can be applied to help all board members in their onerous task of oversight and setting the strategy for their organisation. At the core of the organisation will be the business's culture. It is unlikely that there will be only one culture. In a large, complex organisation, there will be many cultures operating in the various functional ‘silos’ and team structures. A poor culture will undermine all the good management intentions and guidance. It may jeopardise compliance and, if in a significant area, threaten the existence of the firm. Both boards and regulators should start by trying to find out more about the various cultures operating within the regulated organisation and measuring and, if necessary, taking action if the cultures revealed are unacceptable. This can be achieved using several methods, including attracting, recruiting and inducting people who exhibit the right culture and encouraging a culture of trust and accountability. Board actions should also include setting targets congruent with a good culture and ensuring that stakeholders in the organisation who are celebrated and promoted demonstrate the culture sought by the board; removing obstacles to personal accountability such as the prevalent ‘so-called three lines of defence model; encouraging all stakeholders in the organisation to raise concerns and ensuring that these are listened to and acted upon and that no vindictive action is taken against those that speak up, and finally, ensuring a continual focus on training, including that of the board and senior executives.

Keywords: Director accountability; Three lines of defence; Culture of speaking up; Board and corporate culture; Senior Managers and Certification Regime; Non-executive directors (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035317899
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