Corporate culture – it’s a term that has been bandied about so much in recent years that it’s become something of a buzzword, and has lost a lot of its impact. However, despite that, creating a positive business culture is more crucial now than at any previous point in history. Compliance leaders and other executives must take defined steps to improve the business culture in order to enjoy a wide range of benefits.
Negative corporate cultures occur for many reasons. Perhaps the most common is that leadership simply doesn’t buy into the need for a positive culture, or that executives are unaware of how their actions, decisions, and words affect the rest of the company. Unethical leaders also make it less likely that employees will speak up, and that bad actors will be held accountable.
Fear of reporting unethical activities, such as discrimination, sexism, and racism are also common reasons for cultural failures. If employees are too afraid to speak up when something is wrong, action cannot be taken and the situation only worsens. Finally, if employees do not trust their colleagues, it creates an atmosphere where speaking up is impossible.
Why Build a Positive Business Culture?
Building a more positive corporate culture offers a broad range of mission-critical benefits. For instance, organizations with a positive culture see a dramatic decrease in the number of misconduct cases in comparison to companies with low-integrity cultures. You will also see an increase in employees reporting situations of misconduct, increased employee engagement, and increased productivity.
In addition to those benefits, the value of a stronger reputation and improved goodwill cannot be discounted.
Ethical organizations are seen in a much more positive light by their customers and clients, but also by their employees and prospective new hires. This is a vital part of becoming an employer of choice and attracting (and then retaining) top talent.
Finally, a stronger, more positive business culture also helps to offset or even prevent business and financial losses. Did you know that the average cost of a compliance failure for enterprise-level organizations is $40 million? With the right steps and the correct compliance strategy, there is no reason for your business to suffer that financial impact.
What Drives a Positive Business Culture?
Now that we’ve seen why it is important to improve your culture, we must turn our attention to the drivers that influence the culture.
What elements go into building an ethical climate within a business or other organization?
- Comfort – In an ethical environment, employees are comfortable speaking up about misconduct
- Justice – In an ethical organization, employees feel that the corporate response is commensurate with the degree of bad behavior
- Top Down – To create a positive, ethical environment, values must be practiced by those at the top
- Communication – Finally, communication must be open, frequent, and ongoing
Creating a positive, ethical environment and bolstering corporate culture is possible, but it will require compliance leaders to create and implement a strategy that ensures the factors above are addressed.
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