In a comprehensive global research led by Allen & Overy, financial services firms face regulatory and reputational risks due to insufficient consideration given to organisational culture.
While there are clearly significant opportunities, senior leaders are equally concerned about the impact of new technology on company culture, as well as the challenges posed by managing a multi-generational workforce.
Findings from the study, which surveyed over 500 financial services organisations, include:
- New and emerging technology platforms are perceived as the biggest threat to company culture by 62% of senior leaders.
- Over 50% of respondents consider managing a multi-generational workforce to be a significant challenge to their firm's culture in the next 12 months.
Allen & Overy Global Conduct and Culture Report Findings
The responses also shed light on the maturity of organisational culture, primarily influenced by individual boards and senior leadership, where further improvement is required:
Only 56% of respondents rated their organisations favourably in terms of encouraging employees to speak up and voice concerns.
Merely 25% of respondents gave favourable ratings to their senior leaders' role-modelling of expected behaviours.
Although human resource managers play a crucial role in setting the behavioural tone among their direct reports, respondents perceived them to be the least committed to the company culture compared to other senior leadership teams such as the Board or C-suite.
Highlighting the significance of culture across various sectors, Sally Dewar, CEO of Allen & Overy Consulting stated, "Culture continues to be a top priority for policymakers, regulators, and senior boardroom leaders in financial services firms, but the insights from this research are applicable to companies in many other industries. Leadership teams must continuously assess and evolve their approach to organizational culture, considering that the factors influencing culture today differ significantly from those of previous years."
While senior leadership is indeed mindful of technological risks, it also recognises the potential for opportunity. Effectively utilising technology to enhance feedback and data analysis can bring cultural issues to the forefront, leading to long-term improvements when addressed.
Furthermore, Clive Garfield, Executive Director of Allen & Overy Consulting said, “Whilst the technological risk is front of mind for senior leadership, it can also create opportunity. Used effectively to enhance feedback and data analysis, it could highlight cultural issues that, when actioned, lead to long-term improvements. And, a multi-generational workforce brings diverse thoughts and opinions, which are proven to enhance decision-making. Understanding this and adapting business strategy can have a direct influence on overall business performance. Organisations need to position culture as a strategic imperative and embed corporate values to support their business strategies.”