THE CHARTERED INSTITUTE OF INTERNAL AUDITORS (CIIA) has called for businesses to audit their corporate culture and behaviour to address risks.
Scandals including the financial crisis, phone hacking and care failures at NHS hospitals have highlighted the role of culture in corporate failures, the international body said. As a result, public and private organisations are facing greater pressure to improve standards.
Boards should begin by defining and communicating expected culture standards in order to inspire the behaviour that is needed and manage risks, the CIIA said.
Audits should go beyond process and controls to “undertake root-cause analysis to identify cultural weaknesses” and assess culture throughout organisations, not just at the top, it added.
CIIA chief executive Ian Peters said businesses should “focus more closely on getting the underlying culture which dictates behaviours right”.
“On the basis that what gets measured gets done, they must take seriously the need to audit their progress in addressing the need for change,” he added.
The Co-operative was heavily criticised for its practices, culture and structure in two reports this year, after reporting record £2.5bn losses for 2013.