Corporate Culture

Corporate Culture

Corporate Culture

“Corporate culture” is becoming an increasingly important theme in contemporary corporate governance, even though some commentators have described the expression as vague, “elusive” (Hsieh et al, 2018) and “inherently slippery” (Awrey et al, 2013). Recent attention given to culture arguably reflects a growing awareness that corporate governance is “a complex system, whose structure and functioning depend on more than law and economics” (Licht, 2014). Although the concept of organisational culture is relatively new to corporate governance, its roots go back many decades to literature in the fields of sociology, anthropology and psychology (Hsieh et al, 2018).

In recent times, numerous international regulators, including the Basel Committee on Banking Supervision, the UK’s Financial Reporting Council, the Central Bank of Ireland and the Australian Securities and Investments Commission (“ASIC”) have promoted the need for a positive corporate culture. Corporate culture also plays an important role in the United States, because it can operate as a mitigating factor under US Federal Sentencing Guidelines, where a corporation can show that it had an effective compliance and ethics program.

Numerous rationales have been offered to support the need for a good corporate culture – namely, that it is a vital component of effective risk management; that it contributes to compliance; that it supports professionalism, integrity and accountability; and that good corporate cultures promotes long-term financial and business success.

There is a connection between the social purpose of corporations and culture (Hsieh et al, 2018). Corporate culture and social purpose are both central aspects of The British Academy’s current research project on The Future of the Corporation (The British Academy, Future of the Corporation: Research Summaries, 2018). Some recent scandals involving corporations with defective corporate cultures highlight the way in which such cultures can harm various stakeholders and the community in general (Hill, 2019). A growing number of international codes, such as the 2018 UK Corporate Governance Code,  stress that a corporation’s culture should promote “integrity and openness” and be aligned with the organisation’s “purpose, values and strategy” (see 2018 UK Corporate Governance Code, 1, Principles B and F). The UK Code also draws attention to the need to ensure that incentive remuneration schemes are similarly aligned (see 2018 UK Corporate Governance Code, [40]).

Corporate culture is a developing theme in modern corporate governance, and there are increasing efforts to measure the construct of culture, using either quantitative or qualitative measures (Hsieh et al, 2018). Recent literature in this field also examines how positive corporate cultures can be created and how they affect organisational behaviour (Akash et al, 2018); the role of stakeholder voice in corporate cultures (Davies and Hopt, 2018); the link between corporate culture and innovation (Fiordelisi et al, 2018); and liability for defective corporate cultures that result in organisational wrongdoing (Hill, 2019).

This page is intended as a resource for issues pertaining to corporate culture and corporate governance as examined through the disciplines of economics, business strategy, law and other areas.

Queries, suggested inclusions, and project funding proposals should be directed to Prof. Jennifer Hill (



Academic Papers:

Policy papers, reports, viewpoints and speeches:

Blog posts: 





Prof. Jennifer Hill

Governance through Shame and Aspiration: Index Creation and Corporate Behavior

After decades of de-prioritizing shareholders' economic interests and low corporate profitability, Japan introduced the JPX-Nikkei400 in 2014. The index highlighted the country's "best-run" companies by annually selecting the 400 most profitable...Read more

Akash Chattopadhyay
Matthew D. Shaffer
Charles Wang
22 November 2018

Non-Shareholder Voice in Bank Governance: Board Composition, Performance and Liability

Starting from the well-evidenced fact that banks with shareholder-focussed corporate governance fared worse in the financial crisis than those without, this paper considers various initiatives and proposals to re-orient board rules in relation to...Read more

Paul Davies
Klaus Hopt
11 September 2018

Creative Corporate Culture and Innovation

We define creative companies by means of the Competing Value Framework, and we identify them by means of textual analysis. We show that a creative corporate culture is an important driver of innovation, as measured by the number of patents a firm...Read more

Franco Fiordelisi
Luc Renneboog
Ornella Ricci
Saverio Stentella Lopes
06 November 2018