‘CBI’s failure to address toxic work culture proved costly’

Written By Mandy Kirby

Confederation of British Industry

Corporate culture is ever evolving so open communication is key

When a company experiences a decline in its reputation, financial value, or both, it’s easy to point fingers and blame external factors. However, more often than not, the root cause can be traced back to a cultural failing within the organisation.

In the case of the recent scandal at the CBI, the failure to address a toxic work culture proved to be a costly mistake.

The member firms of the CBI, leaders of British industry and finance, were apparently blindsided by reports of a toxic internal culture. They failed to regularly ask about the culture of the organisation representing their voice and brand and the result was major brands being forced into a reactive stance as they saw themselves at risk of negative brand contagion.

Corporate culture is ever evolving, with each generation creating different ways of working. What was acceptable in the past to both employees and customers is changing and ignoring these shifts in values will be costly. Stakeholders and leaders who fail to recognise nascent signs of poor culture, who fail to listen to internal reports of toxic behaviours, often appear surprised by the magnitude of damage when issues finally hit the headlines.

This is an even greater risk for firms that are charged with stewardship of capital. It’s imperative to bake good culture into the DNA of any business, by prioritising transparency and open communication internally, you mirror that externally, building trust and relevance with your end consumers, which ultimately future-proofs your business. It’s a win-win situation for all. In today’s world, companies can no longer afford to sleepwalk through these critical issues.

The lesson from the CBI scandal is clear: ignoring toxic work cultures can lead to the demise of a company. Leadership should value openness and be receptive to change. Companies must pay attention to the mood of their workforce, regularly assessing their culture, and be transparent about their values and practices rather than get caught up in optics, glossing over reports of a negative internal culture.

This article first appeared on ESG Clarity.