swissVR Monitor: "Corporate culture more important for success than compliance and risk management".

According to the new swissVR Monitor corporate culture is a top 10 topic - it is more important than compliance or risk management. In order to assess the corporate culture - without being involved in the day-to-day business themselves - employee surveys and company visits are of particular help. According to the survey, the greatest influence on the culture is the behaviour and communication of the top management - for better or for worse. This is shown by the swissVR Monitor I/2019, compiled by the swissVR association together with the consulting firm Deloitte and the Lucerne University of Applied Sciences and Arts.

While topics such as Talent and Compliance have lost importance, the topic that was asked for the first time manages to Corporate culture straight into the top 10 - and thus displaces Risk Management. Strategic topics such as Digitization, Competitive behaviour and Transactions have also gained in importance among Swiss board members over the past 12 months.

"The issues facing boards of directors are changing rapidly. Strategies are now being adjusted at ever shorter intervals. Such strategic changes of direction require an equally rapid alignment of corporate culture. Today, boards need to place issues such as culture even higher on their agenda," said Reto Savoia, designated CEO of Deloitte Switzerland. "The swissVR Monitor shows that the role model function of management is absolutely central to the culture and therefore the success of a company. I see it as one of the most urgent tasks of the board of directors to keep a close eye on culture and compliance and to take corrective action, even if the numbers are right."

Corporate culture as a competitive advantage

For almost two-thirds of the board members surveyed (64%), a good corporate culture is an important competitive advantage and driver of corporate success. However, more than a third of respondents (36%) tend not to adapt the corporate culture at all or not at all in the case of strategic realignments. This may also be due to the fact that board members see the responsibility for corporate culture clearly with the CEO and management: For the vast majority (88%) of respondents, it is clear that corporate culture is predominantly shaped by management. According to around 67% of respondents, they should do this by exemplifying the values of the company ("Tone at the Top").

"Digital transformation and innovation are a critically important competitive advantage today. For sustainable corporate success, it is important that the Board of Directors shapes a corporate culture that not only promotes change but also demands it from employees. In addition to shared values and an open culture of discussion, this includes empowering and motivating employees to explore new avenues - across all levels of the company," explains Cornelia Ritz Bossicard, President of swissVR.

Internal and external observations important

Board members want to assess the corporate culture. In doing so, they particularly like to rely on employee surveys (74%) or on impressions that they take away from company visits and interactions with employees (65%). They have great confidence in being able to assess the corporate culture personally without being active in day-to-day operations themselves. In some cases, external assessments are also consulted: The reputation of the company in the media and the public (41%) as well as impressions from feedback from customers and suppliers (31%).

Economic outlook clouds over

The board members surveyed see clouds gathering in the economic sky. In the last swissVR Monitor (summer 2018), fewer respondents had already given a positive assessment of the outlook than a year ago today. This time, their share has almost halved again from 54% to 28%. At the same time, the proportion of neutral and negative assessments has increased. The overall significantly more pessimistic picture is therefore relatively close to the economic outlook in the swissVR Monitor from the beginning of 2017. The mood of uncertainty worldwide seems to have reached the boards of directors.

However, respondents are somewhat more confident about the outlook for their own industry and, above all, their own business. Still 42% instead of 46% assess their respective industry outlook positively. 14% (six months ago: 10%) believe that worse times lie ahead for their industry. Overall, therefore, there is a slight but clear negative trend. When it comes to assessing their own business, however, the picture is quite different: surveyed board members continue to be predominantly optimistic about the prospects for their business (59% compared to 60% in the last survey). This has hardly changed in the last four editions of the swissVR Monitor.

Prof. Dr. Christoph Lengwiler, lecturer at the Institute of Financial Services Zug IFZ at the Lucerne University of Applied Sciences and Arts and Vice-President of swissVR: "The more pessimistic assessment of future economic development that has been observed within six months is a cause for concern. Apparently, geopolitical tensions and negative reports from companies are leading to serious concerns. An economic downturn would increase the pressure on companies and further accelerate digital transformation. Those organizations that take cultural aspects into account in strategic realignments would score points. Boards of directors would therefore do well to think more deeply about the current corporate culture and possible changes to be introduced for the future success of the company."

You can find out more about the Deloitte SwissVR Monitor at here