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Leader: Businesses should invest more in culture, it can reap bottom line dividends

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LATER this month I will be hosting the CFO Agenda. Coming days after the landmark EU Referendum, Financial Director’s conference for senior finance professionals will undoubtedly be dominated by the fallout from the vote.

Whether the country opts to ‘Leave or Remain, businesses will need to digest the impacts of currency fluctuations, market movements and whole host economic and trading impacts. Yet any market dislocation is likely only to be temporary and most should be able to ride this out.

Far more important to the success of a business is effective management and a healthy corporate culture. Instilling the right culture must come from the top. This might not at first appear to be the preserve of finance, but it is core to corporate governance and is the duty of all board members.

It is fundamental to business performance and can have a real impact on the bottom line. A survey of FTSE 35o executives by accountants EY found that half the UK’s biggest listed companies state that investing in culture has increased their operating profits by 10% or more. However, the majority of boards still need to take greater responsibility for defining, shaping and monitoring culture in their organisation

It is the role of board members and executive management to set strategy and allow and trust their lieutenants and department heads to deliver corporate aims. But decision making must feel collegiate, with buy-in gained from all members of the finance team and broader business.

If management make decisions in isolation of those responsible for delivering the outcomes, while also micro-managing at a granular level they fail to see the helicopter-level picture and sap the morale of those working under them.

Through analytics and its unique role as business partner, finance is the function best placed to assess the effectiveness of culture, governance and managing organisational change.

But don’t take my word for it. An array of CFOs, policymakers, academics, politicians and one World Cup winning head coach will be at the CFO Agenda to provide their insights on all of these issues. Make sure you are to.

 

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