The phrase good organisational culture is frequently used; people nod sagely and there is a broad assumption that everyone knows what is meant by it. This briefing paper provides chief audit executives (CAE) with insight and theory on organisational culture; the detail that sits between the lines of many articles and conversations on the subject.
Why is this important for CAEs? Because organisational culture is like DNA; it runs through everything from conversations, ways of working, social events to decision making, recruitment and policies. Trying to deliver internal audit services without an appreciation of the organisations culture is like a doctor trying to cure a symptom without knowing the patient. Is this why some CAEs toil and strain whilst others thrive?
What is organisational culture?
Culture is ever-present; whether acknowledged or not, it exists in all organisations regardless of size, sector, performance or age. It is the essence that runs through everything; a powerful, invisible force that impacts the behaviours and thoughts of people at all levels of the organisation. It is the sum of the beliefs and values set by those in positions of power or influence yet maintained by every individual, every new recruit and every interaction.
Over the years there have been a myriad of headlines regarding corporate failings that are rooted in culture; Presidents Club sexism, Volkswagen emissions, Enron collapse, Oxfam prostitutes, Metropolitan Police racism, BBC gender pay gap, Amazon tax payments, Barings Bank performance rewards, Payment Protection Insurance (PPI) sales, BP oil disaster. Organisational culture has a symbiotic relationship with governance, internal control and risk management.
Can internal audit provide complete assurance without an appreciation of culture?
It can be the difference between a board paying lip-service to governance or understanding its value. For auditors it can be the reason for an audit finding to…
"There is nothing as deceptive as an obvious fact."
- Arthur Conan Doyle