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Reporting to Reality: Culture and the Corporate Governance Code
Culture has moved from a people priority to a boardroom imperative. The latest updates to the UK Corporate Governance Code make it clear that boards must “assess and monitor culture and explain how the desired culture has been embedded.” That gives culture a formal seat at the governance table. But are organisations ready to fill it with substance?
Making the invisible, visible
Culture has often been seen as intangible and constantly evolving – one of the reasons it’s sometimes viewed as difficult to define or measure.
Yet its impact is undeniable. Culture can make or break an organisation: it shapes how decisions are made, how people respond under pressure, and whether employees feel proud and motivated to be part of the company. Still, it’s too often described in vague, feel-good terms – positive, inclusive, collaborative – and without evidence, those claims risk sounding pretty hollow.
A good example of making culture visible is Microsoft under Satya Nadella. In a deliberate bid to shift from a “know-it-all” to a “learn-it-all” mindset, Microsoft embedded culture change into its everyday behaviours - through growth-mindset training, clear behavioural expectations and visible collaboration. For employees, that shift dismantled a previously competitive, siloed environment and replaced it with one built on curiosity, openness and shared learning. Engagement and inclusion scores improved, and people reported greater psychological safety and collaboration across functions.
The change also mattered to investors. A culture that encouraged experimentation and learning became the foundation for Microsoft’s strategic reinvention – accelerating innovation in cloud computing and AI, restoring market confidence, and helping the company grow its market value several-fold. In other words, cultural change wasn’t a soft exercise, it was a strategic lever that connected directly to business resilience and performance.
This kind of deliberate, evidenced approach is what the new Corporate Governance Code calls for – boards that not only understand culture, but can show how it is embedded and monitored in practice. It shows that cultural aspiration must be anchored in action, with visible signals that others – from employees to investors – can observe and measure.
Unfortunately, many companies still rely heavily on annual employee surveys as their main cultural indicator, often disclosing little more than the response rate in their reports. But a survey alone doesn’t cut it – it’s a snapshot, not a system.
From signals to substance
In tackling the measurement challenge it’s useful to note that healthy cultures send out clear signals that boards can pay attention to.
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Employees have a voice – people speak up, ideas are heard and acted on, and psychological safety is visible.
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Leaders are visible and aligned – they communicate openly, model company values and are rewarded accordingly.
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Inclusion is real, not rhetorical – diverse voices are present at senior levels and opportunities are equitable.
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Collaboration and innovation thrive – teams share knowledge, challenge respectfully and solve problems together.
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Values drive decisions – choices made internally and externally reflect the organisation’s purpose and principles.
Spotting these signals is one thing, measuring them however, is another. Boards that pay attention to these indicators consistently through surveys, listening programmes, exit data, stakeholder interviews and other feedback are best placed to report meaningfully on culture – and act should any issues arise.
Asking the right questions
So, with the useful base of understanding what signals they can look for to evidence the health of their culture, what should Boards do next? Those that take culture seriously interrogate the data. The best start with a few core questions:
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Are we clear on what culture truly means to our organisation specifically?
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What cultural signals are we seeing – and what do they tell us?
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Do leaders consistently embody the culture we aspire to?
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Where are the gaps between aspiration and lived experience?
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How do we capture and evidence culture in ways that withstands scrutiny?
Reporting reality
The Governance Code is clear that reporting should be outcomes-based – not just statements of intent. The strongest reports blend numbers and narrative: engagement trends, retention data, leadership trust scores and wellbeing measures alongside stories of leaders modelling values and employees driving change. The blend of both creates a picture that feels real.
Admiral is one organisation that does this well, combining storytelling with detailed data. Tangible examples are given, e.g. on how they retain their culture in a world of hybrid working. How they monitor culture is explained in depth alongside a scorecard of metrics and an externally-facilitated culture audit. Their reports show not just what the culture is, but how it comes to life day-to-day.
Take the chance to think twice
As we move through this year’s reporting season, we’d encourage everyone involved in shaping culture content in their annual reports, to pause and reflect on the information they have and consider what it really shows.
The question isn’t whether you can report on culture, but whether you can demonstrate that it’s alive, intentional, measured, evidenced and shaping decisions every day. The boards that succeed are the ones that combine insight with action: understanding the signals of a healthy culture, asking the right questions, and embedding that learning into leadership, processes and governance.
How we can help:
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Employee experience and culture building – helping organisations define and embed culture through EVP, listening programmes, values and behaviours, and leadership alignment.
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Integrated reporting and governance – translating that lived culture into credible disclosure, storytelling and meaningful KPIs aligned to the UK Corporate Governance Code.
Bringing the two together turns culture from a ‘soft issue’ into a measurable system of accountability and performance, creating reports that are both credible and actionable.
To summarise?
Boards that treat the new mandate as a tick-box exercise will miss the point – and the opportunity. The real question is not whether you can report on culture, but whether you can show it is alive, measured and shaping decisions every day. Those who can, will not only meet reporting requirements, but build organisations that are resilient, trusted, and ready for the future.