It is clearly stated in the new Danish Corporate Governance Guidelines section 2.1.1 that by end of 2021, the boards of all publicly listed companies should demonstrate that they have considered the company purpose and ensured and promoted a good culture and sound values in the company.
One thing is to ensure that your company has defined a relevant purpose, clear values and an ideal culture. Another and even more challenging task is for the board to make it a reality. Is your board prepared?
During February to May 2021, the team at Leadership Advisor Group carried out desk research using publicly available documents from each of 24 the companies on the Danish C25 index.
We evaluated how well each company demonstrated that is has a defined purpose, culture and values, and whether each has the basics in place to be able to report on this according to the recommendations by the end of their financial year.
Our analysis shows that while all but one company have defined a purpose, less than half of the C25 are perceived to have defined a meaningful purpose, aligned with the Danish corporate governance term of “Purpose”.
Additionally, while most companies have defined company values and / or company culture, it appears that these two elements are not always defined in a way that signals there is a clear link between them.
Moreover, it appears that several companies have defined company purpose, values and culture without considering connecting or aligning the three (purpose, values and culture). Hence it can be questioned how the board expects the company leaders and employees to implement and use the company purpose, values and culture as guiding principles.
It is evident that if the C25 companies should be able to comply with 2.1.1. by the end of the year and report in a meaningful way about how the board has considered the company purpose and ensured and promoted a good culture and sound values, there is work to be done and no time to waste.
We will follow up at the end of 2021 with an analysis of how well the boards have succeeded in demonstrating that they have considered the company purpose and ensured and promoted a good culture and sound values in the company.
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Clients may contact us for full detailed results at firstname.lastname@example.org.
If your board would like assistance in this matter, Leadership Advisor Group has developed a new tool to help boards create a baseline for understanding, ensuring and promoting a good culture, sound values and meaningful purpose in the organization. The tool is called The Cultural Behavioral Indicator Analysis (CBI) and will show alignment and gaps in the cultural behavior within and between the leadership levels in the organization. The results will be presented to the board in a way that enables the board to have a factual, qualitative and quantitative discussion about how to ensure and promote a good culture, sound values and meaningful purpose in the organization. The aim of the discussion will be to decide on actions needed and to articulate the board’s involvement in the above, in the annual report or on the company webpage, in order to comply with The Danish Corporate Governance Recommendation 2.1.1.
To receive the full analysis (available for clients only), please contact email@example.com.
Interested in self-evaluation? Try Online Board Evaluations
Well-aligned with national corporate- and foundation/charity governance recommendations, our board clients usually conduct an external board evaluation every three years. However, most national governance recommendations recommend that boards perform a self-evaluation in the years between an external board evaluation. Therefore, we have developed OnlineBoardEvaluations.com which is a tool enabling boards to self-evaluate effectively and effortlessly every year.
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