Corporate culture is gaining prominence with 80 per cent of the Indian companies saying it is a key item on their board agenda and they have established internal controls in this regard, says a survey.
According to a Grant Thornton global survey of 2,500 businesses in 36 economies, 85 per cent (71 per cent globally) of boards in India are establishing internal controls that address culture and employee behaviour.
The Securities and Exchange Board of India, in recent guidelines on board evaluation, has recommended that boards set a corporate culture and values which should be followed by the company.
"...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," Grant Thornton India LLP Partner - India Leadership Team Harish H V said.
The survey report - 'Corporate Governance 2017 - Building blocks of Corporate Culture' further said Indian businesses are also investing resources to institutionalise the right culture in their organisation. Measures being taken include town hall meetings to ensure open and timely communication, developing codes of conduct, and periodic training.
"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," Grant Thornton India LLP Partner Bhanu Prakash Kalmath S J said.
The report noted that boards should conduct a 'Culture Audit' to understand and document the organisation culture.
Based on the audit, boards should define code of conduct and create channels for open communication. It is important that boards take an active role in this process to ensure that the organisation culture is in favour of the business and ethics rather than against it, it added.
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