State Street Global Advisors will focus on corporate culture as a top priority for asset management engagement in 2019, President and CEO Cyrus Taraporevala announced in a letter to the boards of 1,120 companies listed in the main world indices.
In the letter, Mr. Taraporevala said that while corporate culture as an “intangible asset” rather than a tangible one is difficult to measure and manage, “we also recognize that in a time of unprecedented business disruption, Whether in the form of technology, weather, or other exogenous shocks, a company’s ability to promote the attitudes and behaviors necessary to navigate much more difficult business terrain will be increasingly important. “
Quote a report from an accounting firm Ernst and Young, Mr Taraporevala said that an average of 52% of an organization’s market value can come from intangibles such as corporate culture, and an accompanying document cites the UK Financial Reporting Council’s claim. in June 2018 of the importance of culture in formalizing the roles of boards of directors in aligning corporate culture with the purpose, values and strategy of the UK Code of Corporate Governance.
The document accompanying the letter provides a framework for companies to assess the alignment of corporate culture with their long-term strategies, as well as frameworks on how boards of directors can guide senior management in the process. Implementation.
The SSGA document defines corporate culture as encompassing “a wide range of shared attitudes shaping the behaviors of individuals as a group within an organization”, which enables employees to identify with their employers and to differentiate them from competitors.
The letter and the paper are available on SSGA website.