A ‘good culture’ is one of those phrases that everyone supports; it fosters corporate resilience, stakeholder trust and promotes long-term value. Too often however, it is used as a catch-all for everything an organisation would like to be, rather than recognition of how the business actually operates.
Culture is sometimes described as the personality of a business. The analogy captures the features that are distinctive and recognisable, yet it can also make culture sound vague or intangible. Culture is the practical consequence of how a business is governed, managed, rewarded and led. That is why boards should be wary of treating culture as a soft human resources initiative.
Flexible working, wellbeing programmes, diversity policies and employee recognition all have their place, but seeing the promotion of a ‘good culture’ in this way can easily lead to a strategic dead end, where culture is treated as a “nice to have” or even an obstacle to profit. It can also draw businesses into the wider “culture wars”, where adversarial political and ideological positions distort corporate decision-making. While culture programmes may be important indicators of an organisation’s values, if culture is reduced to those initiatives alone, it risks becoming a benefits package with better branding.
A better view is to see culture as the product of the interaction between formal systems and informal behaviour. Formal elements include governance structures, reporting lines, controls, remuneration, policies and procedures. Informal elements include habits, assumptions, leadership signals, peer pressure and the small compromises people see being made. Culture emerges from the relationship between the two.
It follows that culture cannot be imposed through a slogan, away day or internal campaign. Employees quickly learn which behaviours are truly valued, which shortcuts are ignored, which concerns are unwelcome and which priorities dominate when pressure increases.
Why culture programmes fail
Culture programmes fail when they are inauthentic, namely producing elegant language, workshops and internal campaigns, but remaining above the business rather than embedded. Unless the programme includes audit, review and remediation of governance, incentives, controls, leadership behaviour and ordinary decision-making, it will be decorative rather than of operational value.
Programmes that treat culture as the promotion of something that is objectively ‘good’ that can be announced by management, rather than as the evolving product of systems, incentives and behaviour will also fail.
Misalignment is the common denominator. A business may profess integrity and long-term thinking yet reward short-term revenue at any cost. It may celebrate openness yet treat challenge as disloyalty. It may publish values while tolerating behaviour that undermines them. In each case, the written culture is defeated by the operating reality.
The misalignment can be worse than having no programme at all. Once stakeholders conclude that the language is performative, the programme loses credibility and the organisation loses trust.
How culture programmes succeed
Successful programmes are specific and unique to the business, embedded and continuously reviewed. They define culture by reference to business-specific behaviours, not generic aspirations. They align incentives with desired conduct. They require leadership to model the expected standards. They enforce policies consistently. They create effective feedback and whistleblowing channels. They review cultural indicators as part of ordinary governance, risk and compliance processes.
The boardroom question
Culture is not a detachable workstream. It is the lived consequence of how a business is governed, managed and incentivised. It cannot be created by language alone or delegated entirely to a single function. It must be embedded in systems, behaviours and decisions.
For boards, the lesson is clear. Culture programmes should be part of ordinary governance and strategic oversight. A programme succeeds when it helps the organisation understand how it really behaves, identify where that behaviour is inconsistent with its purpose, and correct the systems producing the wrong outcomes.
The question is not whether a business can claim to have a “good” culture. The real question is whether its culture is identified, understood, aligned and actively governed. If it is, culture can become a source of resilience, trust and long-term value. If it is not, it may become the hidden weakness that undermines even the most carefully designed strategy.
Vernon Dennis is the author of Directors’ Duties, ESG and Sustainable Strategies – A Fresh Perspective (Law Society, June 2026) and Head of Business Advisory at the London law firm Howard Kennedy.